Freelance terror operations, either affiliated with Al Qaeda (search) or inspired by its goals, are a growing menace as the terrorist network's loss of central leadership degrades its potency, the State Department said Wednesday.

Nevertheless, Usama bin Laden's (search) Al Qaeda remained "the primary terrorist threat to the United States in 2004," the department said in its first "Country Reports on Terrorism."

"There is a declining role for a significantly degraded Al Qaeda and a rising role for groups inspired by Al Qaeda," State Department counsel Philip D. Zelikow said at a briefing on the document.

The report cited as examples the March 2004 bombings of commuter trains in Madrid, Spain, and an Algerian terrorist leader's announcement of fealty to Al Qaeda.

The incidents "illustrate what many analysts believe is a new phase of the global war on terrorism, one in which local groups inspired by Al Qaeda organize and carry out attacks with little or no support or direction from Al Qaeda itself," the report said.

The report expanded on testimony to the Senate Intelligence Committee in February from CIA Director Porter Goss. He spoke of gains against Al Qaeda and its affiliates but warned that they remain dangerous.

Jointly with the State Department report, the new National Counterterrorism Center issued a compilation of international terror incidents last year with numbers of incidents and victims.

It said 651 significant international terrorist attacks caused 9,321 casualties worldwide, including 1,907 deaths. The dead, wounded or kidnapped included 103 Americans or 1 percent of the total.

On Tuesday, Rep. Henry Waxman (search), D-Calif., said the 651 attacks were triple the 2003 number but told Secretary of State Condoleezza Rice (search) the report probably understates the toll. Zelikow said the toll is irrelevant to last year's, because the terrorism center had greater manpower and resources to put into the project than the State Department had.

The country reports especially credited Pakistan for its work in curtailing the effectiveness of Al Qaeda, blamed for the Sept. 11, 2001, attacks on the United States and other spectacular assaults around the world.

"Al Qaeda leadership was degraded through arrests and ongoing Pakistani operations to assert greater control along the border with Afghanistan where some Al Qaeda leaders are believed to hide," the report said. "Numerous Al Qaeda and affiliated foot soldiers were captured or killed during the year."

Still, it said, "Many senior Al Qaeda leaders remained at large, continued to plan attacks against the United States, U.S. interests and U.S. partners."

Additionally, the fugitives "sought to foment attacks by inspiring new groups of Sunni Muslim extremists to undertake violent acts in the name of jihad," it said.

Some of the events were carried out by groups whose existence became known only after the attack, the report said.

"I do believe we are winning the war on terrorism, but I believe it will be a very long struggle," Zelikow said.

Until now, the State Department has been the government's principal authority on terrorism. It has distributed figures with its annual "Patterns of Global Terrorism," based on definitions of terrorism established by Congress in legislation that ordered distribution of the annual terrorism report.

Last year's report caused problems for the State Department after it was learned that it greatly understated the number of incidents that had occurred. On Wednesday, House Democratic leaders asked the department's acting inspector general, Cameron Hume, to investigate whether the mistakes were politically motivated.

The National Counterterrorism Center is working on a new list, to be released in June, that will use new, more realistic, definitions of terrorism. "It is going to be a much more comprehensive data set," said John Brennan, the center's interim director, and will be likely to encompass many additional incidents.

As an example of the rules under which the State Department, and his center for the listings distributed Wednesday, have operated, Brennan said the report lists only one of two Russian airliners that suicide bombers blew out of the sky last year.

The one that counted had an Israeli aboard. The other had all Russians, which made it a domestic incident.

"It makes no sense to have the definition of terrorism depend on checking the nationality of all the victims," Brennan said.