Bahrain's foreign minister says world leaders must do more to cut off funding for terrorist groups and prevent them from profiting from illegal businesses.

Sheik Khalid bin Ahmed Al Khalifa told a gathering of international delegates in the Bahraini capital Manama on Sunday that combatting the financing of militants such as the Islamic State group "is half the battle to defeating them."

The one-day Manama meeting is aimed at bringing together financial experts to improve the fight against extremist fundraising. It follows a meeting in Paris in September in which diplomats from around the world pledged to fight Islamic State militants.

It includes representatives from several Arab nations as well as the United States, Europe and international bodies such as the World Bank and the International Monetary Fund.