• Iraq provides terrorists with "a training ground, a recruitment ground, the opportunity for enhancing technical skills," said David B. Low, the national intelligence officer for transnational threats.
• "There is even, under the best scenario, over time, the likelihood that some of the jihadists who are not killed there will, in a sense, go home, wherever home is, and will therefore disperse to various other countries."

Before the U.S. invasion, the CIA said Saddam Hussein had only circumstantial ties with several al Qaeda members. Osama bin Laden rejected the idea of forming an alliance with Hussein and viewed him as an enemy of the jihadist movement because the Iraqi leader rejected radical Islamic ideals and ran a secular government.

"At the moment," NIC Chairman Robert L. Hutchings said, Iraq "is a magnet for international terrorist activity."

• President Bush has frequently described the Iraq war as an integral part of U.S. efforts to combat terrorism.
• But the council's report suggests the conflict has also helped terrorists by creating a haven for them in the chaos of war.

The report also says the emergence of China and India as new global economic powerhouses "will be the most challenging of all" Washington's regional relationships. It also says that in the competition with Asia over technological advances, the United States "may lose its edge" in some sectors.