Israeli Defense Minister Ehud Barak has disputed the US conclusions, saying Israeli intelligence believes Iran is still trying to develop nuclear weapons.

President Bush defended his approach on Tuesday, and Rice said it would be a “big mistake” to ease any diplomatic pressure on Iran despite the new US findings.

“I continue to see Iran as a dangerous power in international politics,” Rice told reporters traveling with her to Ethiopia where she planned to see African leaders. “At this moment, it doesn’t appear to have an active weaponisation programme. That frankly is good news. But if it causes people to say, ‘Oh, well, then we don’t need to worry about what the Iranians are doing,’ I think we will have made a big mistake.”

The finding comes at a time of escalating tensions between the United States and Iran, which President Bush has labeled part of an “axis of evil,” along with Saddam Hussein-era Iraq and North Korea.

The United States and some of its allies accuse Iran of seeking to develop nuclear weapons, a claim denied by Iran, which says its nuclear programme aims only to generate electricity.

Iran has rejected two UN Security Council resolutions, demanding that it halt uranium enrichment, a process that can produce either fuel for a reactor or a nuclear warhead.

Rice urged nations such as China and Russia not to harden their stance against a new round of sanctions.

“People need the opportunity to absorb what they’ve heard,” Rice said. “We have been completely transparent about what the intelligence assessment says. And people need a chance to read it. When they do that and when they read it in its detail and nuance, they will be able to see the points that I have made.”

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