The White House is actively focused on ways to improve domestic intelligence gathering as a weapon in the war against terrorism but is not now considering setting up a new domestic spy agency to do that job, senior administration officials said on Saturday.

The officials confirmed that high-level discussions are taking place about how domestic intelligence gathering can be improved with the impending creation of a Department of Homeland Security. But they said efforts also continue to restructure the domestic intelligence capabilities of the FBI.

"The administration is focused on setting up the intelligence analysis and infrastructure protection division of the Department of Homeland Security as well as focused on restructuring the FBI," said Gordon Johndroe, spokesman for the Office of Homeland Security.

"Our immediate priorities are getting this new department up and running, and continuing with the refocusing of the FBI towards countering terrorism which Director [Robert] Mueller initiated this summer" Johndroe said.

The New York Times reported, meanwhile, that the Bush administration has begun monitoring activities of Iraqis inside the United States in an effort to identify possible terrorist threats posed by sympathizers to the Baghdad regime.

The Times, quoting senior government officials, said the intelligence program is previously undisclosed and involves tracking thousands of Iraqi citizens and Iraqi-Americans with dual citizenship who attend American universities or work at private U.S. companies.

The effort is to identify those who might pose a risk if there is a United States-led war against Iraq. Some of the targets of the operation are being electronically monitored under the authority of national security warrants and efforts are underway to recruit others as informants, the newspaper said.

If American forces invade Iraq, the effort would be intensified through detentions and arrests of Iraqis or Iraqi sympathizers believed to be planning domestic terrorist operations, the Times quoted the officials as saying.

At the White House, Johndroe declined to confirm the report, saying the White House does not comment on intelligence matters.

But a senior administration official said anonymously: "The American people should rest assured that their government is taking all appropriate steps in order to protect them."

The White House officials said meetings to improve domestic intelligence gathering will continue.

"For the first time in a number of years the intelligence community will soon have a new agency, the Department of Homeland Security, so it is appropriate to focus on how that department will interact with efforts to pursue the war on terrorism," said one official who asked to remain anonymous.

But, the official emphasized, "there are no plans at this time to move toward a new domestic intelligence agency."

"We are focusing on the FBI and their role in counterterrorism and how all this fits into the intelligence community," the official said.

Sen. John Edwards, D-N.C., proposed in October that a new domestic intelligence agency be established to replace FBI units criticized for intelligence failures before the Sept. 11 terrorist attacks.

"The law enforcement impulses of the FBI consistently trump intelligence needs," Edwards said. "Instead of attempting to turn the FBI into something it isn't, we should establish a new agency that is focused on gathering intelligence about terrorist threats here at home."

He said he is proposing an agency similar to those at work in Great Britain and Canada. He said it should be structured to protect civil liberties and predicted it would prove more effective than the FBI in tracking terrorists inside the United States.