What does Bangladesh terror mean for the fight against ISIS

Reaction from the 'Special Report' All-Star panel

This is a rush transcript from "Special Report," July 1, 2016. This copy may not be in its final form and may be updated.

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SEBASTIAN GORKA, MARINE CORPS UNIVERSITY: Look at what has happened in the jihadi world in the last two years, two attacks in Paris, an attack in Brussels, San Bernardino linked to ISIS, Orlando, linked to ISIS, Istanbul apparently linked to ISIS, and now we have Bangladesh. The world is on fire.

MIKE BAKER, FORMER CIA COVERT OPS OFFICER: The concern has been, it's not -- this is something that just developed now with this attack. The concern has been over the past year, year and a half, that we're seeing a new generation of jihadists rising up.

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BAIER: We're still getting more details out of Bangladesh, as the death toll now officially stands at two police officers, but many believed to be hostages inside. ISIS claiming responsibility in Dhaka, the hostages held at a restaurant near the U.S. embassy there in Bangladesh. And that is the diplomat's area, and a restaurant frequented by western and other diplomats.

Let's bring in our panel and start there: Fox News media analyst and host of Fox's "MediaBuzz" Howard Kurtz; Karen Tumulty, national political correspondent for The Washington Post, and Steve Hayes, senior writer for The Weekly Standard.

All right, Steve, obviously this is still ongoing, but the fact that ISIS is claiming responsibility and it seems like we're seeing more and more of these attempts, Ramadan coming to an end.

STEVE HAYES, THE WEEKLY STANDARD: Yes, certainly. We've seen an increase in attacks in Bangladesh in south Asia more broadly over the past year, year-an-a-half. And this is similar in some respects to an attack that took place in Jakarta at a Starbucks, similar operationally, and it was also an area that's frequented by diplomats, by westerners, what have you.

This looks like it would be an operational leap forward. It looks better coordinated. There are talk of nine attackers, so this may be more serious and suggest that ISIS is really building a support system in Bangladesh as it is throughout south Asia. I think the irony is, as you point out, at the end of Ramadan, and just two weeks ago the president of the United States stood before cameras and said these are not holy warriors. They certainly think they're holy warriors.

BAIER: Karen, this is a challenge for this administration as it continues to try to deal with how its dealing with ISIS.

KAREN TUMULTY, THE WASHINGTON POST: That's right. And Bangladesh is a country that has been viewed as moderate. There has been attacks, but until now they've been done by small groups with machetes. The government has tried to pin the blame so far just on sort of domestic groups, political opposition. This is something on a scale that has not been seen there. And I think it is going to be a very delicate question, both in this country and there in sort of acknowledging that there's something bigger afoot in this country.

BAIER: Eye-opening after this and as you heard Sebastian Gorka say in Turkey and Orlando for people here, it's in their mind.

HOWARD KURTZ, FOX NEWS MEDIA ANALYST: It does feel like the new normal. And the more that ISIS or ISIS recruits can pull off these smaller scale attacks on soft targets like restaurants, the more countries it can hit, the more television coverage it can generate, the more ISIS can wield its weapon of fear. And there is a hunger, I think, and you see this reflected in the campaign for a strategy that takes the fight to ISIS, because we can't defend every soft target, every nightclub, every airport counter in the world. But there is a hunger for the administration to do something, but it needs allies. The U.S. can't do it all on this global scale.

BAIER: We'll keep you updated here. If we get any more details we'll bring them to you here on FOX.

Let's turn now to the U.S. election and the thing that has dominated really the last couple of days, and that is this meeting on a plane.

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LORETTA LYNCH, U.S. ATTORNEY GENERAL: It's important to make it clear that that meeting with President Clinton does not have a bearing on how this matter is going to be reviewed, resolved, and accepted by me, because that is the question that it raises. And the fact that the meeting that I had is now casting a shadow over how people are going to view that work, it's something that I take seriously and deeply and painfully.

DONALD TRUMP, PRESUMPTIVE REPUBLICAN PRESIDENTIAL NOMINEE: It just happened to be, oh, just a coincidence, you know. He just happened to be at the airport at this time. Think of it, just happened to be at the airport. I think he really opened it up. He opened up a Pandora's Box, and it shows what's going on, and it shows what's happening with our laws and with our government.

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BAIER: Karen, we reported today that FBI agents, at least some of them, many of them, are very upset with this development and how it looks, and also the fact that Bill Clinton is not only just the former president, he's also potentially a witness or a target in the Clinton Foundation investigation part.

TUMULTY: Yes, this is Bill Clinton's greatest misjudgment on a tarmac since LAX had to shut down two runways so he could get a haircut. Yes, and just the fact that, you know, Bill Clinton, who conducted his entire presidency in the independent council era would not understand what, you know, at a minimum the appearances of this meeting would be, it's just astonishing.

BAIER: What we didn't hear is that the attorney general was recusing herself, officially, and that, you know, says something, too.

HAYES: No, it really says something. And the fact that they couldn't get their stories straight all day, remember, the original report, I think it was broken on "Good Morning America," suggested that she was going to accept the FBI's investigation and move on. Then she spoke and said she would accept the FBI's recommendations. Then she said, I expect to accept the FBI recommendations. And then later she says, finally, there are leaks later this afternoon saying that she remains involved and will be the ultimate decider. So nothing has changed from where we were this morning. She remains involved. And it's just a lot easier if you tell the truth.

And I think that, you know, the big problem here is, why was the FBI telling this reporter or telling reporters or people on the tarmac they couldn't take pictures of this? Whether it was a cover-up or not, it sounds like this was something they didn't want to get out. And, you know, this is exactly why people don't trust Washington.

BAIER: And this, whatever happens, will have an asterisks now, for some people.

KURTZ: Adding to public distrust on the ultimate outcome. Look, I can tell you as an old justice reporter, this is a head-slapping case of bad judgment. It's not just about the optics. Law enforcement officials are not supposed to engage in what are called ex parte contacts with anybody that could be the subject or target or a witness in an investigation. Bill Clinton is a charming guy, but Loretta Lynch should have picked off that plane.

And on the question of her role, an update from the top Justice Department spokesman this afternoon to Yahoo! News, the two political appointees, says the spokesman, directly under Loretta Lynch will review the career prosecutor's recommendation, and, though unlikely, could overrule it. So there is still a political layer here.

BAIER: But quickly, the politics fallout, as Donald Trump, obviously talking about this again today, does it benefit him in some way, politically?

TUMULTY: Well, yes, because it does cast doubt, whether if the FBI does not recommend indictments, whether that's going to be viewed as an exoneration. There's just sort of too much, kind of, going on, putting noise into what is supposed to be a pretty straightforward investigation. The FBI takes breaches of national security very, very seriously. And that is what is at question here with this whole question of a private e-mail account.

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