In the bleak report, released Tuesday on President Bush's orders, the nation's most veteran analysts conclude that despite serious damage to the leadership of al Qaeda, the threat from Islamic extremists has spread both in numbers and in geographic reach.
"If this trend continues, threats to U.S. interests at home and abroad will become more diverse, leading to increasing attacks worldwide,' the document says. "The confluence of shared purpose and dispersed actors will make it harder to find and undermine jihadist groups."
The former director of the CIA's National Counterterrorism Center, John Brennan, told CBS Evening News anchor Katie Couric that intelligence community analysts are concerned that the conflict in Iraq is "fueling the fires of Islamic extremism inside Iraq and outside.
"There is just a ready propaganda tool that the Islamic extremists use by showing the footage of the continuation of the struggle inside Iraq," he said.
Mr. Bush, who is known for aggressively guarding government secrets, took the extraordinary step of declassifying part of the report to prove his point that a selective leak distorted the study, reports CBS News chief White House correspondent Jim Axelrod.
Mr. Bush also said that the timing shows that the leak was motivated by pure politics, Axelrod adds.
"Here we are coming down the stretch in an election campaign and it's on the front page of your newspapers. Isn't that interesting?" Mr. Bush said at a news conference.
The intelligence assessment, completed in April, has stirred a heated election-season argument over the course of U.S. national security in the years following the 2003 U.S.-led invasion of Iraq.
Mr. Bush and his top advisers had said the broad assessment on global terrorism supported their arguments that the world is safer. But more than three pages of stark judgments warning about the spread of terrorism contrasted with the administration's glass-half-full declarations.
The report said:
The assessment also lays out weaknesses of the movement that analysts say must be exploited if its spread is to be slowed. For instance, they note that extremists want to see the establishment of strict Islamic governments in the Arab world — a development they say would be unpopular with most Muslims.
"Exposing the religious and political straitjacket that is implied by the jihadists' propaganda would help to divide them from the audiences they seek to persuade," the report says.
It also argues that the loss of key leaders — Osama bin Laden, Ayman al-Zawahri and Abu Musab al-Zarqawi — in "rapid succession" would probably cause the group to fracture.
Al-Zarqawi was killed in June, but the top two al Qaeda leaders have remained elusive for years.
The declassified summary of the report was only four pages long, Axelrod reports, and Democrats are clamoring to see its entire 30 pages.