US Secretary of State Rex Tillerson held talks with Turkey's leaders yester day in a one-day visit to a Nato ally crucial to the fight against Islamic State but increasingly at odds with Washington and its European partners.

Tillerson held a closed-door meeting with President Tayyip Erdogan at which he was expected to discuss the US-led fight against Islamic State, including the planned offensive against its Syrian stronghold of Raqqa, where Turkey has been angered by US support for Kurdish militia fighters.

He earlier met Prime Minister Binali Yildirim and discussed efforts to defeat Islamic State in Syria and Iraq, Yildirim's office said.

Erdogan has been incensed by Washington's readiness to work with the Kurdish YPG militia in the fight against Islamic State.

Ankara sees the YPG as an extension of PKK militants who have fought a three-decade insurgency inside Turkey and are deemed a terrorist group by the United States and European Union.

US-Turkish ties soured under former US president Barack Obama and officials in Ankara have been hoping for a reset under President Donald Trump. But there have been few signs of improvement.

Tillerson's trip has been further clouded by the arrest in New York on Monday of an executive of Turkey's state-run Halkbank, who is accused of conspiring in a scheme to evade US sanctions on Iran.

Shortly after Tillerson's arrival in Ankara, Justice Minister Bekir Bozdag told broadcaster A Haber that the arrest was a "completely political move" designed to tarnish Turkey and Erdogan.