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A newly declassified and controversial intelligence report says that the Iraq conflict has become a "cause celebre" for Islamic extremists, but if their efforts fail it could hinder recruiting of more would-be terrorists.

The key findings of the National Intelligence Estimate state that the number of "jihadists" is growing in size and geographic dispersion, and if the trend continues it could lead to more terror attacks worldwide and more threats to U.S. interests at home and abroad.

Rather than point the finger solely at U.S. involvement in Iraq, the NIE instead concludes that counterterrorism efforts in general have caused a rise in global terror, and "greater pluralism and more responsive political systems in Muslim majority nations would alleviate some of the grievances jihadists exploit."

Raw Data: Declassified NIE Key Judgments Report (pdf)

The report, completed last April and released Tuesday on orders from President Bush after portions were leaked to The New York Times and other newspapers, drew a strong response from the president.

"Some people have, you know, guessed what's in the report and have concluded that going into Iraq was a mistake. I strongly disagree. I think it's naive," Bush said during a news conference with Afghan President Hamid Karzai in the East Room of the White House.

"I think it's a mistake for people to believe that going on the offense against people that want to do harm to the American people makes us less safe," Bush said.

The president, responding to a reporter's question about the report, said he was declassifying part of the NIE because he wanted the public to be able to read the conclusions without filters that "create confusion in the minds of the American people."

Bush said he agreed with one conclusion — that the effort in Iraq had forced Al Qaeda cells to become more diffuse and independent. But he questioned why such an old document had appeared on the front pages of major newspapers just six weeks ahead of the November midterm election.

"Some people have guessed what's in the report and concluded that going in to Iraq was a mistake. I strongly disagree," Bush said. "Someone took it upon themselves to leak classified information for political purposes."

One judgment reached by the report's authors is that the Iraqi conflict has almost become a source of jihad inspiration.

"We assess that the Iraq jihad is shaping a new generation of terrorist leaders and operatives; perceived jihadist success there would inspire more fighters to continue the struggle elsewhere," the report reads.

"The Iraq conflict has become the 'cause celebre' for jihadists, breeding a deep resentment of U.S. involvement in the Muslim world and cultivating supporters for the global jihadist movement. Should jihadists leaving Iraq perceive themselves, and be perceived, to have failed, we judge fewer fighters will be inspired to carry on the fight," the report continues.

Democrats have argued for the past year that the Iraq war is making it harder to fight the War on Terror. Some who had seen the classified version suggested the White House was picking and choosing which portions to declassify in order to support the president's policies in Iraq.

"When the American public does see it, there's going to be further important and compelling evidence that we have got to change course in Iraq because the Iraq war is indeed fueling terrorism around the world," said Sen. Carl Levin, D-Mich., before the report's release.

House Democratic Leader Nancy Pelosi said that the NIE conclusions prove that President Bush has left the public with a false impression about the war in Iraq and the greater global War on Terror.

"Rather than reducing the number of terrorists worldwide and lessening the motivation of terrorists to attack the United States, the war in Iraq is having precisely the opposite effect," Pelosi, D-Calif., said in a statement. "We did not invade Iraq to fight terrorism as the president would now have us believe, but we're less safe today because the war in Iraq has hindered our ability to make progress in combating terrorism."

"There is no question that many of our policies have inflamed our enemies' hatred toward the U.S. and allowed violence to flourish. But, it is the mistakes we made in Iraq — the lack of planning, the mismanagement and the complete incompetence of our leadership — that has done the most damage to our security," said Sen. Jay Rockefeller, D-W.Va., ranking Democrat on the Senate Intelligence Committee.

Pakistani President Pervez Musharraf, a U.S. ally in Washington for a meeting on Wednesday with Bush , found himself drawn into the political dispute. He was asked in an interview about an assertion in his new book that he opposed the invasion of Iraq because he feared that it would only encourage extremists and leave the world less safe.

"I stand by it, absolutely," Musharraf said. "It has made the world a more dangerous place."

But Republican Sen. Mitch McConnell of Kentucky disputed the conclusions reached by Democrats.

"Whoever leaked this report forgot to mention a key finding of the intelligence community: If we defeat the terrorists in Iraq, there will be fewer terrorists inspired to carry on the fight. In other words, defeating terrorists in Iraq not only secures that new democracy, but prevents future attacks here at home. This is a dramatically different message than the selective leaks to the media," he said in a statement.

The president rejected claims that the U.S. presence in Iraq has increased terror threats, saying the United States wasn't in Iraq when America was attacked on Sept. 11, 2001; or when the USS Cole was hit in December 2000; or when the U.S. embassies in Tanzania and Kenya were bombed in 1998.

"If we weren't in Iraq, they'd find some other excuse because they have ambitions. They kill to achieve their objectives," Bush said. "The best way to protect America is to defeat these killers overseas so we don't have to face them at home."

The report says that "four underlying factors are fueling the spread" of terrorism. They include long-held grievances over corruption, injustice, and fear of Western domination that has caused "anger, humiliation and a sense of powerlessness"; the slow pace of reform in the fields of economics, social and political environments and "pervasive anti-U.S. sentiment." The final factor concludes that jihad in Iraq is encouraging jihad elsewhere.

The report states that the jihadists have several vulnerabilities that could be exploited, specifically, that not every Muslim wants to surrender to Sharia law. Other weaknesses include "dependence on the continuation of Muslim-related conflicts, the limited appeal of the jihadists' radical ideology, the emergence of respected voices of moderation and criticism of the violent tactics employed against mostly Muslim citizens."

The president said that the leaked report distressed him because, in part, it shows that someone in the government is trying to play politics, but more so, because it hurts the intelligence collection process.

"I think it's a bad habit for our government to declassify every time there's a leak because it means it's going to be hard to get good product out of our analysts," he said.