Worldwide military spending (search) rose dramatically in 2003, the Stockholm International Peace Research Institute (search) said Wednesday, citing the U.S.-led invasion of Iraq as the main cause.

According to the Stockholm-based think tank, military spending rose by 11 percent in 2003, or by $956 billion dollars. The group called it a "remarkable increase." The amount was up 18 percent from 2001 and 6.5 percent from 2002.

"It's very close to the Cold War (search) peak in 1987," said SIPRI researcher Elisabeth Skoens, who co-authored the report.

The figure corresponded to 2.7 percent of the world's gross domestic product.

Individually, the United States led the world in defense spending, accounting for 47 percent of the $956 billion, followed by Japan with 5 percent, and Britain, France and China, each with 4 percent, and the remaining 153 countries accounting for 36 percent.

She added that the increase in U.S. spending was the result of missions launched in Afghanistan and Iraq, along with the war on terror.

The report also singled out the threat posed by weapons of mass destruction, but found that the Iraq invasion may have caused some countries to rethink their own plans for WMDs given the willingness by the United States and others to use force.

It cited Libya, which last year admitted it had been seeking nuclear weapons but agreed to renounce their use and dismantle its own program as one example of how the threat of force, combined with behind-the-scenes talks, could hinder their development and spread.

"Perhaps luckily, evidence of past and present WMD problems in ... Iran, Libya and North Korea was strong enough to maintain the momentum of international cooperation against the proliferation menace — and many states were motivated to work for less violent solutions," wrote Alyson J.K. Bailes, the think tank's director.

The think tank warned that while the invasion may have served as a warning to other states with WMDs, it could have the reverse effect in that some states may see an increase in arsenals as the only way to prevent a forced regime change.

The report said the March 2003 invasion of Iraq was an example of U.S. military might, but noted that the postwar occupation, which has seen hundreds of coalition soldiers killed in attacks by insurgents, was evident that control there remained haphazard at best.

"The ongoing violence in Iraq and the continuing disputes between the country's political, religious and ethnic groups could, however, also result in continuing instability within Iraq," said Andrew Cottey, whose report detailed the effect of the invasion and its aftermath.

He warned that instability in Iraq could spread and bring civil war to neighboring states.