The National Intelligence Estimate (NIE) report, which was declassified on Monday, disclosed for the first time that Iran had not been pursuing a nuclear weapons development programme for the past four years.

"This is a declaration of victory for the Iranian nation against the world powers over the nuclear issue," said a jubilant Ahmadinejad said during a visit to Ilam province in western Iran. He addressed thousands of people who greeted the remarks with celebratory whistles.

"This was a final shot to those who, in the past several years, spread a sense of threat and concern in the world through lies of nuclear weapons. Thanks to your resistance, a fatal shot was fired at the dreams of ill-wishers and the truthfulness of the Iranian nation was once again proved by the ill-wishers themselves."

The International Atomic Energy Agency (IAEA), the UN nuclear watchdog, gave a more nuanced response to the NIE.

Mohamed ElBaradei, the IAEA director general, who has had prickly relations with the Bush administration, called the US intelligence report a "sigh of relief" because its conclusions gelled with his agency's own findings.

While not going so far as to give Iran a clean bill of health, ElBaradei told reporters in Brasilia, Brazil, that Iran had been "somewhat vindicated in saying they have not been working on a weapons programme, at least for the past few years".

The Chinese foreign minister, whose country has reluctantly supported previous UN sanctions against Iran, today ducked questions as to whether Beijing would support further measures.

Yang Jiechi told the Chatham House thinktank in London that Iran had the right to pursue peaceful nuclear energy, but said it should abide by relevant UN resolutions calling on its stop uranium enrichment.

"China hopes all parties will work together to peacefully resolve this issue," Yang said.

Yesterday, the Iranian leadership called for plans for new United Nations sanctions against the country to be dropped in the face of the report.

Existing sanctions had been rendered "illegal" and the report showed the Bush administration's warnings about Iran's intentions were "baseless and unreliable", said Iran's foreign ministry spokesman, Mohammad Ali Hosseini.

The report's conclusions have forced America's European allies, as well as fellow UN security council members, to re-evaluate policy towards Iran. The report will make it harder for the US, Britain and France to persuade China and Russia to impose tougher UN security council sanctions, despite George Bush's assertion at a press conference yesterday that Iran remained dangerous.

China's ambassador to the UN, Guangya Wang, was asked by reporters whether the report made the prospect of new UN sanctions less likely. He said: "I think the council members will have to consider that, because I think we all start from the presumption that now things have changed."

While the chances of a US military strike on Iran's nuclear facilities are receding, the Israeli government continues to insist Tehran poses a serious danger and that the US is misreading the intelligence.

Against a background of triumphalism in Tehran, Hosseini said the findings destroyed the legal basis for last year's decision to refer Iran's case to the security council. The council has passed two sets of sanctions and is debating a resolution that would impose a fresh embargo. However, Iranian officials claimed that this was now unlikely.

The report was greeted as a vindication by supporters of Iran's radical president, who has fought a bruising battle for control over nuclear policy with pragmatists who have accused him of pushing Iran towards a military confrontation with the US.

Ahmadinejad's spokesman, Gholamhossein Elham, said: "Americans should pay the price for their words."

Iran has said throughout the crisis that it has embarked on uranium enrichment for purely civilian purposes, to help meet its electricity and other energy needs. But the US and Britain continue to suspect it is a step towards building a nuclear weapon.

US and European diplomats said yesterday that the new intelligence estimate would not derail the movement towards a new set of sanctions. A senior Russian official agreed, adding that the new measures could be implemented in the next few weeks.

The British foreign secretary, David Miliband, said suspicions of Iran's intentions would continue as long as it persisted in enriching uranium in the absence of any nuclear power stations in which the fuel could be used.

"That's why people have fears about what the enrichment is for. That's why they have fears about the dangers of weaponisation," the foreign secretary said.

At a meeting in Paris on Saturday, senior officials from the five permanent members of the security council and Germany - the six-strong contact group - agreed in principle on a new set of UN sanctions.

Participants said Russia and China, which had been reluctant to tighten sanctions, had given a green light to a limited range of targeted measures. The details are being discussed in phone calls between representatives of the six countries this week.

Moscow and Beijing appeared to have softened their resistance after an IAEA report last month found that Iran had rapidly expanded its uranium enrichment.

What they said: Intelligence reports



2005 Assess with high confidence that Iran currently is determined to develop nuclear weapons despite its international obligations and international pressure, but we do not assess that Iran is immovable.





2007 Judge with high confidence that in fall 2003 Tehran halted its nuclear weapons programme. Judge with high confidence that the halt lasted at least several years. Department of Energy and National Intelligence Council have moderate confidence that the halt to those activities represents a halt to Iran's entire nuclear weapons programme. Assess with moderate confidence Tehran had not restarted its nuclear weapons programme as of mid-2007, but we do not know whether it currently intends to develop nuclear weapons. Judge with high confidence that the halt was directed primarily in response to increasing international scrutiny and pressure resulting from exposure of Iran's previously undeclared nuclear work.