The United States needs to shift from muscle-flexing to alliance-building when it seeks to wield power in the world if it wants to patch up its battered global image, a new American report concludes.

"America's reputation, standing and influence are at all-time lows, and possibly sinking further," the report by a 20-member think-tank commissioned by the Centre for Strategic and International Studies (CSIS) said, citing half a dozen opinion polls from around the world.

"The terrorist attacks on 9/11 caused America to become a frightened and angry nation," it said.

"We reacted in ways that alarmed people the world over ... we relied excessively on hard military power to fight the war against terrorists and violent extremists.

"Ultimately this is a battle that will be won by ideas, not bullets. Just like the Cold War, we will prevail when the world chooses the opportunities we defend over the despair offered by our enemies."

The report, which was more than a year in the making, said the United States has focused too much on the 'war on terror' and relied too heavily on military might in its foreign policy.

"The Pentagon is the best-trained and best-resourced arm of the Federal Government ... it tends to fill every void.

"The United States must become a smarter power by investing once again in the global good - providing things that people and governments in all quarters of the world want but cannot attain in the absence of American leadership."

It called on the next US president to chart a new course towards a "smarter" foreign policy that balances hard power - "wielding carrots and sticks to get what you want" - and soft power - "the ability to attract people to our side without coercion."

By shifting its foreign policy focus from the war on terror to championing the global good, the United States will not only defeat terrorism but will also restore its greatness, the report said.

The commission included former military commander in Iraq Anthony Zinni; ex-US ambassador to the United Nations, Russia and Israel Thomas Pickering; former Supreme Court justice Sandra Day O'Connor; members of Congress; business leaders; and the heads of non-profit organisations.

- AFP