The U.S. Director of National Intelligence has said that the terror group Islamic State (ISIS) has developed and utilised chemical weapons, specifically ''sulphur mustard'' during attacks in Iraq and Syria.

Sulphur mustard, commonly known as mustard gas, is a blister chemical warfare agent that causes severe, delayed burns to the eyes, skin and respiratory tract. The Centers for Disease Control and Prevention (CDC) said the blister agent damages cells within minutes of contact.

In his testimony before the Senate Armed Services Committee where he spoke about the ISIS' growing sophistication online and in the battlefield, James Clapper cited an investigation into an alleged [ISIS] attack in Syria in August that concluded that "at least two people were exposed to the blister agent, sulphur mustard,'' according to Fox News.

Clapper told the committee that this is the first time an extremist group has produced and used a "chemical warfare agent in an attack since Aum Shrinrikyo used sarin in Japan in 1995,'' referring to the subway attack in Tokyo that year.

"[The Syrian government] has used chemicals against the opposition on multiple occasions since Syria joined the Chemical Weapons Convention. ISIS has also used toxic chemicals in Iraq and Syria, including [the blister agent] sulfur mustard," Clapper said.

The top U.S. intelligence official also said the agency has received ''numerous allegations'' of ISIS' use of chemicals in attacks in Syria and Iraq, and continues to track these reports.

Fox News reported that a doctor who was in northern Iraq last year claimed that he treated Kurdish fighters whom ISIS used as "lab rats" for weapons of mass destruction.

The variety of burns and illnesses suggested that "mustard gas, precursors, as well as neurotoxic acids" were being tested, said the report.

There is also growing evidence that Damascus has been using chemical weapons against the Syrian opposition and civilians, it said.

The sarin gas attacks on the Tokyo subway in Japan in March 1995 killed at least 12 people, and severely injured 50. It also left 1000 people with temporary vision impairment.

Moreover, Clapper warned that the terror group will continue plotting against U.S. interests overseas while homegrown terrorist attacks will pose the most significant threat to Americans at home.

He also expressed concern that those who draw inspiration from the group's sophisticated media will sustain ISIS' homeland attacks.