By Serajul Quadir and Tom Lasseter

DHAKA/NEW DELHI (Reuters) - When Bangladeshi authorities last month released the names of 261 men who have gone missing from their families, in an attempt to find militants hidden in this country of 160 million people, at the very end of the list was "Jilani alias Abu Zidal".

He was not in Bangladesh. The young man, an engineering school dropout, traveled to Syria last year to fight for Islamic State. In April, IS announced he was blown to bits during battle by a 23-millimeter gun, the sort used to shoot down aircraft.

Asked why Bangladesh's Rapid Action Battalion, a domestic anti-terrorism agency, listed Jilani among the 261 names, its spokesman Mufti Mohammad Khan said neither the man's family nor the police had notified the battalion of the death. "So we included him in the list." A Google search for Jilani, whose real name was Ashequr Rahman, would have brought up an Islamic State notification of his death.

Distributing the alias of a dead jihadi in an all-points bulletin is just one illustration of how Bangladesh authorities have failed to confront the international links of radical Islamist groups in the country. Police and government officials here continue to insist they are facing a home-grown threat -- a "grave error," according to regional experts on militant groups.

Banking officials admit being lost when it comes to interdicting foreign funding for attacks. Law enforcement officers have been slow to complete basic steps of intelligence-gathering, weeks after a July 1 assault in which five young men killed 20 people they'd taken hostage at a cafe in the capital.


The government says the July 1 attack -- and another on July 26 in which police killed nine militants believed to be plotting a similar assault-- were the work of domestic militants and it has dismissed claims of responsibility from the Islamic State.

That fits with a pattern of the nation's rulers reflexively blaming their rivals in Islamist opposition political parties for fomenting unrest.

Dhaka has recently doubled down on its position that IS does not exist in Bangladesh. Authorities on Tuesday named a prime suspect in the café attack, Tamim Ahmed Chowdhury. Analysts say he is the same person IS identified in April as its commander in Bangladesh, who goes by the alias of Sheik Abu Ibrahim al-Hanif.

Asked whether by naming Chowdhury officials had implicitly acknowledged Islamic State is in Bangladesh, Monirul Islam, head of a counter-terrorism cell for the Dhaka police, disagreed. "Our stand is very clear," Islam told Reuters, "that there is no IS inside the country."

Many "lone wolf" and self-styled jihadist groups have pledged support to IS around the world, in addition to a reported 22,000 foreigners who have left their countries of origin to fight on behalf of the group. However, the line between self-declared adherents and actual IS command-and-control is often unclear.

Bangladesh has for years denied that global jihadi networks like al Qaeda and Islamic State operate on its soil. But the recent spate of attacks by scattered and hard-to-detect groups of gunmen claiming loyalty to both shows such distinctions are losing relevance.

That has left authorities struggling to contain an escalating offensive by militants in a nation with a $28 billion-a-year garment industry and which, crucially, sits between south and southeast Asia, regions that contain the largest Muslim populations in the world.


Officials in Dhaka have ordered crackdowns on long-standing Bangladeshi domestic Islamist political and militant groups, arresting more than 11,000 people in June alone in an effort to stop a wave of killings, including by machete hacking, that have targeted liberal bloggers, academics and religious minorities.

The attention to old foes is diverting attention from an emerging international problem, said Animesh Roul, executive director of a New Delhi-based think tank, the Society for the Study of Peace and Conflict.

"They are still focusing too much on the existing militant networks and have failed to realize that the IS or AQIS (Al Qaeda in the Indian Subcontinent) monsters are fishing in the troubled waters and succeeding to a large extent by enticing the youths or grassroots extremists," Roul said.

Roul, who penned a study of the militant threat in Bangladesh published in May by the Combating Terrorism Center at the United States Military Academy, called it "a grave error."

Regional terrorism expert Rohan Gunaratna of the Rajaratnam School of International Studies in Singapore said his research, including interviews in Dhaka with fighters in custody, shows that militants in Bangladesh "received financing, instruction and assistance from the Islamic State".

With an unrelenting focus on domestic Islamic militants, authorities have admitted to being challenged in tracking the movements of money and people from abroad.

Three of the Dhaka cafe attackers went missing for months before the attacks. Asked if authorities had combed through passenger manifests to check whether they had left the country -– a possible clue to who might have helped organized the slaughter -- a police official speaking three weeks after the assault said no one had done so.

"We did not check yet, but that will be done," said Mohammad Masudur Rahman, deputy commissioner of the Dhaka Metropolitan Police.


In interviews with one former senior central banking official and a current senior government official with direct knowledge of banking operations, neither could point to an instance in which Bangladeshi agencies had successfully identified and disrupted external funding for militant groups.

It's a daunting task. Millions of overseas workers sent home about $15 billion in the fiscal year that ended in June 2016, the second-largest source of foreign exchange after garment exports.

Among that diaspora were eight Bangladeshi men, detained between March and April in Singapore, who had formed a group they called the Islamic State in Bangladesh.

Mostly construction workers, they'd failed to reach Syria and were saving cash to return home and launch attacks, according to Singapore's Ministry of Home Affairs. The group's leader, a 31-year-old draftsman at a construction firm, was inspired by Islamic State propaganda he found online.

He had a list of 13 categories of people under a title of "need to kill", including security forces, politicians, media and "disbelievers", such as Hindus and Christians.

Another clutch of men, 26 in all, were arrested in Singapore between last November and December after forming a "study group" that supported the ideology of Al Qaeda and Islamic State, according to Singapore's home affairs ministry.

Members "were encouraged to return to Bangladesh and wage armed jihad against the Bangladeshi government", the ministry said.

(Additional reporting by Ruma Paul and Zeba Siddiqui in Dhaka, Krishna N. Das in New Delhi and Fathin Ungku in Singapore.; Editing by Bill Tarrant.)