Bangladesh police arrested a string of opposition officials on Sunday, a day after the bombing of the country's main Shiite shrine killed one person and left nearly 80 wounded.
The Islamic State group claimed responsibility for the rare attack on the Shiite community in the capital which occurred as thousands gathered for the annual Ashura procession.
But Home Minister Asaduzzaman Khan Kamal denied the jihadist group was behind Saturday's blast, which came just weeks after an Italian aid worker and a Japanese farmer were shot dead -- attacks also claimed by IS.
"We want to say it clearly that the IS organisation does not exist in Bangladesh," the minister told reporters.
"We have not found any basis or anything concrete regarding the (IS) claim."
Prime Minister Sheikh Hasina has blamed the opposition Bangladesh Nationalist Party (BNP) and its main Islamist ally Jamaat-e-Islami for the foreigners' murders.
Police said they detained overnight a former BNP lawmaker in Dhaka and several senior officials from both parties, adding that this was related to previous unrest and unconnected to Saturday's blast.
"He (the BNP lawmaker) was arrested under the country's anti-terrorism laws," inspector M. Kamruzzaman told AFP.
A BNP spokesman accused police of using the blast and foreigners' murders as an excuse to launch a fresh opposition crackdown.
"It is unfortunate that they're using these attacks as a pretext to crack down on the opposition," BNP spokesman Asaduzzaman Ripon told AFP, adding that over a hundred opposition activists have been arrested in recent weeks.
The impoverished country of 160 million mainly moderate Sunni Muslims has been known for its religious tolerance.
But Bangladesh has been plagued by unrest in the last three years, and experts have warned that a long-running political crisis has radicalised opponents of the government.
Suspected Islamists hacked to death four atheist bloggers this year, while several Sufi Muslims have also been killed.
Law minister Anisul Huq said the blast was an attempt to create instability ahead of a final appeal against the death penalty handed down to key opposition leaders for war crimes.
"It is a conspiracy to thwart the implementation of the judgement," Huq told AFP.
Several leading Islamists have been given the death penalty for atrocities committed during the 1971 war of independence, hiking tensions between the secular government and its opponents.
Scores of opposition activists including Islamists have been detained since the start of the year when fresh anti-government protests erupted.