WASHINGTON, Jan 23 (Reuters) - The U.S. National Security Agency's bulk collection of phone records provides only minimal benefits to countering terrorism, is illegal and should end, a federal privacy watchdog said in a report to be released on Thursday, according to media reports.

The Privacy and Civil Liberties Oversight Board, an independent government agency, has shared its conclusions with President Barack Obama, according to reports in the New York Times and Washington Post. The board was not immediately available for comment.

Its conclusion goes further than Obama, who said in a speech on Friday that he thought the NSA's database of records should be moved out of government hands but did not call for an outright halt to the program.

Members of Congress are divided about the value and legality of the program, which collects data on millions of phone calls made in the United States but not the content of the calls. The report could add ammunition to those lawmakers seeking an end to the program.

"We have not identified a single instance involving a threat to the United States in which the telephone records program made a concrete difference in the outcome of a counter terrorism investigation," the board said, according to the newspapers.

The board concluded that the NSA collection raises constitutional concerns with regard to U.S. citizens' rights of speech, association and privacy.

"The connections revealed by the extensive database of telephone records gathered under the program will necessarily include relationships established among individuals and groups for political, religious, and other expressive purposes," the board said, according to the Times and Post.

"Compelled disclosure to the government of information revealing these associations can have a chilling effect on the exercise of First Amendment rights," the board said.

The five-member board was not unanimous on the issue of ending bulk collection. Two members concluded that the program, if modified to include additional privacy protections, should continue, the newspapers said. (Writing by Eric Beech; Editing by Stephen Powell)