Mr Bush said the report had not changed his opinion

Bush on Iran

Mr Bush said the report released on Monday was a "warning signal" and his view that a nuclear Iran would be a danger "hasn't changed".

The president stressed that Iran was still trying to enrich uranium and could restart its weapons programme.

Tehran has denied continued accusations that it is developing nuclear weapons.

Mr Bush said the new National Intelligence Estimate (NIE) was "an opportunity for us to rally the international community" to pressure the Iranian regime to suspend its efforts to enrich uranium - a key part of the process in making a nuclear bomb.

"I view this report as a warning signal that they had the programme, they halted the programme," Mr Bush told a news conference. "The reason why it's a warning signal is they could restart it.

Democratic presidential hopefuls, gathered for a debate in Iowa, condemned President Bush's reaction to the report.

"I vehemently disagree... that nothing has changed and therefore nothing in American policy has to change," said Senator Hillary Clinton.

The president should "seize this opportunity" and engage in "serious diplomacy", she said.

Rival contender Senator Barack Obama said that Mr Bush "will not let facts get in the way of his ideology... and that's been the problem with their [the Republicans] foreign policy generally."

The Democrats had earlier called for a rethink of US policy regarding Iran, in response to the report.

Military option

Monday's report said with "high confidence" that it believed Iran had halted its nuclear weapons programme in 2003, but that it was continuing to enrich uranium.

The declassified summary of the combined assessment of the US's 16 intelligence agencies said Iran was keeping its options open on developing nuclear weapons.

This report proves Bush's statements - which always speak of the serious threat of Iran's nuclear programme - are unreliable and fictitious

Mohammad Ali Hosseini,

Iranian foreign ministry

In quotes: Report reaction

The assessment overturned the previous view that Iran was pushing ahead with a weapons programme.

Concern about Iran's nuclear ambitions has seen the country punished with UN Security Council and unilateral US sanctions.

Analysts say the latest intelligence report will make it harder for proponents of military action against Iran to argue their case.

When asked if military action was a possibility, Mr Bush said: "The best diplomacy - effective diplomacy - is one in which all options are on the table."

'Vindicated'

A BBC correspondent in Washington says there has been a dramatic shift in President Bush's rhetoric on Iran.

He says Mr Bush has gone from raising the spectre of World War III, to saying that Iran could be a danger to the world if it had the knowledge to develop nuclear weapons.

Iran welcomed the report, with Iranian television hailing it as a "victory" and saying Iran had been "vindicated". A foreign ministry spokesman said it proved Mr Bush's statements were "unreliable and fictitious".

France and the UK voiced their support for continued diplomatic pressure on Iran.

The head of the International Atomic Energy Agency, Mohamed ElBaradei, said the new intelligence "should help to defuse the current crisis" but called on Iran to clarify some aspects of its past and present nuclear activities.