The National Intelligence Estimate was completed in April but not made public. Its conclusions, which were first reported by the New York Times, contradict assertions made by President George Bush and White House officials during the fifth anniversary of the September 11 attacks.

"It's a very candid assessment," said one official who has seen the report. "It's stating the obvious."

The report, Trends in Global Terrorism: Implications for the United States, points out the "centrality" of the US invasion of Iraq in fomenting terrorist cells and attacks. One section of the 30-page report, Indicators of the Spread of the Global Jihadist Movement, describes how the American presence in Iraq has helped spread radical Islam by providing a focal point for anti-Americanism.

While arguing that there has been success in dismantling the leadership of al-Qaida and its ability to plan major operations, the report says that radical cells have moved to more than 5,000 websites to organise and spread their message.

The report's tone contradicts recent optimistic assertions by the US administration. It also furthers the divisions between the military and politicians in their assessment of the impact of US policy in Iraq.

In his speech to mark the fifth anniversary of the attacks of 9/11, President Bush said: "The world is safer because Saddam Hussein is no longer in power. The safety of America depends on the outcome of the battle in the streets of Baghdad."

But in a speech in April, thought to be largely based on the report, CIA chief General Michael Hayden, then deputy director of national intelligence, painted a more alarming picture. "New jihadist networks and cells, sometimes united by little more than their anti-western agendas, are increasingly likely to emerge," Gen Hayden said. "If this trend continues, threats to the US at home and abroad will become more diverse and that could lead to increasing attacks worldwide."

Democratic senator Edward Kennedy said in a statement that the report "should put the final nail in the coffin for President Bush's phoney argument about the Iraq war. How many more independent reports, how many more deaths, how much deeper into civil war will Iraq need to fall for the White House to wake up and change its strategy in Iraq?"

But the White House said yesterday that press coverage of the intelligence report did not give the whole picture. A spokesman said terrorist extremism "did not develop overnight" after the US invaded Iraq. "Those seeds were planted decades ago," he said. "Instead of waiting while they plot and plan attacks to kill innocent Americans, the United States has taken the initiative to fight back."

The Republican Senate leader, Bill Frist, said that while he had not seen the report, "we've got to win this war on terror, wherever it is, and it's going to be fought overseas, or if we don't win there, it's going to be fought here in the United States".

The NIE report, the first formal assessment of global terrorism by US intelligence agencies since the invasion of Iraq, was started in 2004 under the leadership of David Low, an officer at the National Intelligence Council. The council, under the auspices of the national intelligence director, John Negroponte, is made up of present and former intelligence officials. It is charged with providing long-term assessments and analyses for the president and officials rather than policy prescriptions.

Its record, however, has been patchy. A NIE report issued in 2002 concluded that Iraq had "continued its weapons of mass destruction programmes", had biological and chemical weapons and "probably will have a nuclear weapon during this decade". A July 2004 NIE report concluded that the possible outcomes in Iraq ranged from a government with tenuous control to civil war.

The report comes days after the House intelligence committee warned that Iraq had become a breeding ground for terrorists and that the danger facing the US was "more alarming than the threat that existed" before 9/11.

The violence continued in Iraq over the weekend with 38 people killed in a suicide bombing in Sadr City on Saturday. Twenty people were killed in violence around Iraq yesterday, as well as two US soldiers in the Anbar province west of Baghdad.

The confusion surrounding Saddam Hussein's trial on genocide charges deepened yesterday when his defence team announced that it would boycott the trial indefinitely.

Five days after the judge in the case was unexpectedly removed, and four days after the new judge ejected the former Iraqi president from the court, Saddam's lawyers said that the court had violated the law. "The court committed several violations of the law and we will not just sit there gagged to give it legitimacy," said Khalil al-Dulaimi, who heads the former president's defence team. He cited the court's refusal to hear non-Iraqi lawyers in the case.

In their own words

"My administration, the Congress, and the United Nations saw the threat - and after 9/11, Saddam's regime posed a risk that the world could not afford to take. The world is safer because Saddam Hussein is no longer in power"

George Bush's address to the nation, September 11 2006

"I think it's clear that we are safer but not really yet safe. We've done a lot ... our ports are more secure, we have a much stronger intelligence sharing operation. We've clearly hurt badly the al-Qaida organisation"

Condoleezza Rice, September 10 2006

"I don't know how much better you can do than no attacks for the past five years. The fact is, the world is better off today with Saddam Hussein out of power. Think where we'd be if he was still there"

Dick Cheney, September 11 2006