The US ambassador in Dhaka has contradicted a magazine report which said Bangladesh had become a safe haven for Islamic militants.

The report published in a recent issue of the New York-based Time magazine had provoked strong criticism from the Bangladesh Government.

Mrs Peters' comments will be welcomed by Dhaka

Ambassador Mary Ann Peters said the US embassy in Dhaka follows terrorism issues closely and had no evidence to support the allegations in the Time report.

The report claimed about 150 al-Qaeda fighters were brought to Bangladesh's Chittagong port by a ship named MV Mecca in December last year.

It said the ship also carried a huge supply of arms and ammunitions from Afghanistan.

No 'basis'

Mrs Peters said the US embassy was not aware of any basis to the story.

She said the Bangladesh Government has been a staunch member of the international coalition against terrorism.

Mrs Peters said while international terrorists could be found anywhere, as they have been in the US itself and in dozens of countries from Spain to Singapore, Bangladesh was certainly not "a hotbed of radical Islam".

Bangladesh: described as a 'hot-bed of terrorism'

Bangladesh's main Islamic party Jamaat-e-Islami, which is a partner of Prime Minister Khaleda Zia's four-party coalition government, has also protested at the Time report.

Jamaat-e-Islami's secretary-general and minister for social welfare, Ali Ahsan Mohammad Mujahid, said the party had never had any links with the so called al-Qaeda network - or with the former Taleban rulers of Afghanistan.

Time magazine's South Asia bureau chief, Alex Perry, had earlier defended his decision to publish the story.

He told the BBC's World Today programme: "We're not saying the government is linked. We're saying the government simply isn't in control and al-Qaeda and Taleban are taking advantage of that."

Earlier accusations

This is the second time within a year that a leading news magazine has accused Bangladesh of being a hot-bed of international terrorism.

In April, the Far Eastern Economic Review infuriated the government by warning its readers to "beware Bangladesh".

On that occasion both the government and the opposition showed a rare display of unity to condemn the magazine, which has been banned in the country.

It is not clear whether similar unity will be shown in relation to the Time allegations.

The main opposition Awami League has long accused the two Islamic parties within the ruling coalition of having sympathy for the Taleban and al-Qaeda.