Tributes paid to terror attack victims in a moving ceremony in Dhaka

Two policemen and 20 hostages, mostly foreigners, were killed at the attack that took place at the Holey Artisan Bakery, located in Dhaka's diplomatic enclave, Gulshan.

Sheikh Hasina placed a wreath of flowers on a plaque in honour of the victims that was set up opposite a small stage with flags from Bangladesh and Italy, Japan, US and India, the four other countries whose citizens were killed by the attackers, according to media reports.

She also spoke to the victim's relatives. Nine Italians, seven Japanese, four Bangladeshis, one American and an Indian died in the terror strike.

The heavily-guarded prime minister left soon after the ceremony, media reported.

Later, tributes were paid by members of the diplomatic missions and families of the victims.

Bangladesh is in national mourning.

Meanwhile, US Secretary of State John Kerry on Sunday called Bangladesh Prime Minister Sheikh Hasina and offered assistance from American law enforcement, including FBI,  to solve the issue

The US Department of State said in a statement: "The Secretary expressed condolences for the loss of so many innocent lives at the hand of terrorists who threaten the United States, Bangladesh, and the international community."

"The Secretary encouraged the government of Bangladesh to conduct its investigation in accordance with the highest international standards and offered immediate assistance from U.S. law enforcement, including the FBI," read the statement.

"He reaffirmed U.S. support for Bangladesh's efforts to bring those responsible for planning and conducting the attacks to justice as well as to prevent future attacks," it said.

Bollywood screenwriter Salim Khan on Sunday condemned the Dhaka terror attack and urged people to condemn it too. Actor Irrfan Khan also condemned the attack.

The Islamic State and a regional branch of Al Qaeda have claimed responsibility for the killings, according to media reports, However, the Bangladeshi government claims local groups were responsible.