The intelligence report released Monday said that Iran stopped its arms drive in 2003, but observers said it may not calm policy hawks calling for President George W. Bush to use military means to end Iran's nuclear drive.

"Those who support military action will continue to do so," Council on Foreign Relations analyst Michael Levi said.

"Those that oppose it will maintain their stance too," Levi, the author of "On Nuclear Terrorism," told AFP.

The National Intelligence Estimate by all 16 US spy agencies cited "high confidence" that Tehran had halted its nuclear weapons program in late 2003 and "moderate confidence" that the program had not restarted as of mid-2007.

The surprise finding undermined US administration claims surrounding Iran's nuclear ambitions, but the NIE cautioned that Iran was keeping its options open and could be able to make a nuclear weapon sometime between 2010 and 2015.

"This doesn't tell us that we don't have an urgent problem here because Iran's growing capability to make nuclear material is still dangerous," Levi said. "We certainly should not think that Iran has no (weapons) ambitions."

Washington and its key European allies -- France, Britain and Germany -- are pressing for new UN sanctions on Iran, but Russia and China will likely seize on the report to defend their resistance to more punitive measures.

"The intelligence assessment gives each nation ammunition to defend the policies they advocated," Levi said.

The White House seized on the report to tout its Iran policy of economic sanctions and international isolation.

"The bottom line is this: for that strategy to succeed, the international community has to turn up the pressure on Iran -- with diplomatic isolation, United Nations sanctions, and with other financial pressure -- and Iran has to decide it wants to negotiate a solution," National Security Adviser Stephen Hadley said.

"The estimate offers grounds for hope that the problem can be solved diplomatically -- without the use of force -- as the administration has been trying to do," he added.

The NIE gives the Bush administration an opportunity to avoid war and pursue more thorough diplomacy, other analysts said.

"The new NIE throws cold water on the efforts of those urging military confrontation with Iran," said Rand Beers, president of the National Security Network think-thank and former adviser to ex-Democratic presidential candidate John Kerry.

"This report demonstrates a clear opening for US policy in terms of engaging on mutual interests with Iran throughout the Middle East. Anything short of doing this will be a missed opportunity," he said.

"Simply put, we have an imminent need for a real dialogue with Iran, not a military confrontation," Beers said.

But Peter Rodman, a former Defense Department official in the Bush administration, said the United States and its allies should deepen economic sanctions and international pressure on Iran.

"I see this as a pause, not a cessation" of Iran's weapons ambitions, said Rodman, an expert at the Brookings Institution. "If they're still pursuing fissile material it's very disturbing.

"What is needed right now is an escalation of pressure in the economic realm," he said. "The best hope for a peaceful solution for this is to use the economic pressures to the fullest."

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