The assessment, American officials were quoted by New York Times as saying, is based on evidence that includes disclosures by a senior Soviet defector, blood samples from North Korean soldiers that show smallpox vaccinations and the recent manufacture of the vaccine in Iraq.

The officials said the warning was an important factor in President Bill Clinton's decision in April to reverse course and delay destruction of American stocks of the virus, the Times said.A panel of World Health Organisation had recommended in 1996 that the smallpox virus be destroyed, officials told the Times.

The United States and Russia retain openly declared stocks of the virus now, about 20 years after its eradication, the Times says, adding the intelligence assessment concludes that Russia most likely is hiding additional stocksof the virus at military sites.

However, the Times report says even though the US has about 56,000 troops stationed near Iraq and North Korea and is periodically bombing Iraq, there seems to be no imminent military threat involving the virus.

The steps to turn a microbe into a biological weapon are many, they say and the government sees no signs of smallpox arms or planned attacks by the suspect countries, it says.

Iraq and North Korea deny that they have ongoing programmes to develop germ warfare and a Russian spokesman was also quoted denying that Moscow maintained secret stocks.

The American warning, the Times said, was based on an analysis of years of data and was prompted by a White House review on whether American stocks should be destroyed by the end of the month as recommended by the WHO panel.