The Department of Homeland Security on Wednesday lowered the national terror threat level from orange, or "high," to yellow, which is "elevated." That means there is a significant risk of terrorist attacks.

Yellow is the middle level of alert status, orange is the second highest and red, or "severe," is the highest.

The alert system serves as a benchmark to help guide law enforcement agencies and businesses -- as well as the general public -- in their security decisions.

The threat level was raised to orange for the third time on March 17, when President Bush gave Saddam Hussein 48 hours to get out of Iraq or face military action by a coalition of the willing.

The national threat level remained at orange during Operation Iraqi Freedom.

"While we continue to be at risk to the threat of terrorism at an elevated level, extensive protective measures remain in place throughout our nation," Homeland Security Secretary Tom Ridge said in a statement Wednesday.

"As [Defense] Secretary [Donald] Rumsfeld has noted, hostilities from Operation Iraqi Freedom still continue and there is, 'a lot of work left to do.' We must be vigilant and alert to the possibility that Al Qaeda and those sympathetic to their cause, as well as former Iraqi-regime state agents and affiliated organizations, may attempt to conduct attacks against the U.S. or our interests abroad."

Many of the extra security measures imposed by the department's "Operation Liberty Shield" also will end. This initiative aimed to increase security at U.S. borders, strengthen transportation sector protections, enhance security at critical infrastructures, increase public health preparedness and make sure all federal response assets can be deployed quickly.

All these measures may have helped thwart some incidents, but details are not yet known.

"We believe that during Operation Liberty Shield, there were individuals in places, at times, where they should not have been," said DHS spokesman Brian Roehrkasse. "The investigations continue on those."

Some components of that program, however, will stay in place, Homeland Security officials told Fox News. Highly visible patrols, for instance have proven to be highly effective deterrents, officials said.

There is a recognition that the costs associated with the orange level of alert cannot be sustained for long periods of time nor do they want the public to become complacent at this heightened level, officials told Fox News.

Homeland Security officials stress that just because the nation's color is yellow and not orange or red right now, it's definitely not a signal to relax. There are still concerns related to Al Qaeda and those sympathetic to its cause.

The New York Police Department said Wednesday that the city would remain on orange alert and checkpoints at bridges and tunnels would continue.

"We are maintaining the current status because New York remains under a greater risk of terrorism than other parts of the country," said NYPD spokesman Michael O'Looney.

The threat alert is raised when the intelligence community has specific evidence indicating there may be terrorist attacks planned on U.S. soil.

When the alert was raised to orange last month, evidence indicated that while Al Qaeda and those sympathetic to their cause are a principal threat, Iraqi state agents, Iraqi surrogate groups, other regional extremist organizations, and ad hoc groups or disgruntled individuals not connected to existing organizations or state agencies, may conduct terrorist attacks against the United States or U.S. interests abroad, according to DHS.

A recent statement from Usama bin Laden, the Saudi-born leader of Al Qaeda, declared some solidarity with Iraqis, although he referred to Saddam's government as infidels.

The U.S. government also feared that operatives working for Iraq's Mukhabarat, Saddam's intelligence service, would attempt bombings or other traditional terrorist-style attacks. Many are thought to work undercover out of Iraqi embassies around the world.

The alert was first raised to orange about one year after the Sept. 11 terrorist attacks and again on Feb. 7, after intelligence reports indicated an increased likelihood that Al Qaeda terrorists might try to attack Americans in the United States and/or abroad in or around the end of the Hajj, the Muslim religious period that ended in mid-February. Soon after that period was over, the alert was lowered to yellow.

Wednesday's decision was made by the Homeland Security Council, comprised of high-level officials such as Ridge, FBI head Robert Mueller, CIA Director George Tenet and Attorney General John Ashcroft. They make recommendations on whether the terror alerts should be raised or lowered, and Bush signs off on it.

Sources told Fox News that Wednesday's decision was based "on their best assessment of the U.S. intelligence information" and, in part, that Operation Iraqi Freedom is winding down, with the major battles apparently over.

Ridge on Wednesday thanked the nation's governors, mayors and other representatives from the public and private sector for their "tremendous support and cooperation throughout the last several weeks." He also thanked law enforcement officials, security personnel and first responders "for their efforts to shield our nation."

"They have protected our freedom at home in this time of war while their brave counterparts in our armed forces are fighting for this same cause thousands of miles away in Operation Iraqi Freedom," Ridge said.

"The signal we have sent our enemies over the past few weeks has been clear. We will continue to resolutely defend our nation and its freedom."

Fox News' Mike Emanuel, Catherine Herridge and The Associated Press contributed to this report.