“Iran was dangerous, Iran is dangerous and Iran will be dangerous if they have the know-how to make a nuclear weapon,” Bush told a news conference a day after intelligence agencies released an assessment that contradicted his administration’s earlier assertions that Iran was developing a nuclear bomb.

The US National Intelligence Estimate (NIE) took US friends and foes by surprise after years of strident rhetoric from Washington accusing Iran of pursuing a covert nuclear weapons programme.

Bush warned just last month that a nuclear-armed Iran could lead to World War III.

Analysts said the new report, which says Tehran’s nuclear weapons intentions are now unclear, might undermine Washington’s drive to persuade other world powers to agree on a third round of UN sanctions against the Islamic Republic.

But Bush maintained there is still a serious threat of Iran using its uranium enrichment programme to restart its weapons programmes if it decides to do so.

Bush vowed to continue efforts to rally the international community to press Tehran over its nuclear programme.

“The best diplomacy — effective diplomacy — is one in which all options are on the table,” Bush said when asked whether military action remained an option.

Iran quickly welcomed the report as a vindication of its long-standing claim that its nuclear programme had only peaceful civilian aims.

Britain and France said they would continue to seek further sanctions against Iran. China and Russia so far have resisted tougher measures.

The NIE, a consensus of US intelligence agencies, concluded, “We do not know whether (Iran) currently intends to develop nuclear weapons.” That marked a dramatic shift from a 2005 intelligence report that stated Iran was “determined to develop nuclear weapons.”