The report, which called for redoubled anti-terror coordination at all levels of government, said Al-Qaeda remains "the most serious and dangerous manifestation" of extremist threats against the United States.

"We also must never lose sight of Al-Qaeda's persistent desire for weapons of mass destruction, as the group continues to try to acquire and use chemical, biological, radiological, or nuclear material," it said.

The White House called anew on the Democratic-led Congress to expand the power of US intelligence agencies to eavesdrop on suspected terrorists "while protecting the civil liberties of Americans."

And following the administration's failure to push immigration reform through Congress, the report called for improved capacity to find and expel illegal aliens, "including criminals and potential terrorists."

The appraisal followed a "National Intelligence Estimate" in July that warned that Al-Qaeda is back in business, sparking Democratic complaints that the war in Iraq has proven a dangerous distraction.

The NIE, which prefigured much of Tuesday's report, said Al-Qaeda had regrouped in Pakistan "and would not hesitate" to use weapons of mass destruction on the United States.

During a testy media conference call, White House homeland security advisor Fran Townsend rebuffed suggestions that the Iraq war had only served to revive Al-Qaeda in the years since the September 11 attacks of 2001.

"Every time I walk into the press briefing room we go through this, and what I will say to you is there should be no question that there were like-minded Islamic extremists inside Iraq and throughout the region," she said.

"And certainly that there is extremism inside Iraq and throughout the region is not a result of the war in Iraq, it is a fundamental front in the continuing war on terror."

Also Tuesday, the White House denied being the source of a leak involving a recent bin Laden video that a private intelligence firm said had sabotaged its secret ability to intercept Al-Qaeda messages.

"Techniques that took years to develop are now ineffective and worthless," SITE Intelligence Group founder Rita Katz told the Washington Post.

According to the White House evaluation, the US-led "war on terror" has deprived Al-Qaeda of its sanctuary in Afghanistan and eliminated many of those responsible for planning 9/11.

Nevertheless, bin Laden's group has protected its top leadership, found new lieutenants, and "regenerated a safe haven" in a lawless tribal area of Pakistan on the Afghan border.

The network has also spawned regional offshoots including an aggressive affiliate in Iraq, and is also likely to "intensify its efforts" to place agents in the United States.

In a letter accompanying the report, entitled "National Strategy for Homeland Security," President George W. Bush said: "Today, our nation is safer, but we are not yet safe."

He stressed that "our efforts also must involve offense at home and abroad," vowing to "disrupt the enemy's plans" and lessen the impact of future disasters through measures to bolster the US economy and its critical infrastructure.

Other organizations that pose a potential threat to the United States include the Lebanese Shiite militant group Hezbollah, the strategy report said.

"Hezbollah may increasingly consider attacking the homeland if it perceives the United States as posing a direct threat to the group or Iran, its principal sponsor," it said.

Neither is the United States immune to homegrown radicals, it cautioned.

"We will continue efforts to defeat this threat by working with Muslim-American communities that stand at the forefront of this fight."

The report also urged nationwide readiness against natural catastrophes, following the devastation wrought by Hurricane Katrina in 2005, and said infectious diseases "pose a significant and ongoing hazard."

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