President George W Bush has insisted that Iran remains a danger to the world despite a US intelligence report it halted its atomic weapons programme four years ago.

Mr Bush vowed to keep up pressure on Tehran and said "all options" are on the table for dealing with Iran.

But he insisted that the United States is stressing diplomacy to resolve the nuclear standoff. He said: "Iran is dangerous and Iran will be dangerous if they have the know-how to make a nuclear weapon."

Mr Bush warned just last month that a nuclear-armed Iran could lead to World War III.

But the US National Intelligence Estimate (NIE) caused raised eyebrows after years of strident rhetoric from Washington accusing Iran of pursuing a covert nuclear weapons programme.

Analysts said the new report, which says Tehran's nuclear weapons intentions are now unclear, might undermine Washington's drive to persuade other world powers to agree on a third round of UN sanctions against the Islamic Republic.

Iran quickly welcomed the report as a vindication of its long-standing claim that its nuclear programme had only peaceful civilian aims.

However Mr Bush maintained there is still a serious threat of Iran using its uranium enrichment program to restart its weapons programs if it decides to do so.

Britain and France said they would continue to seek further sanctions against Iran. China and Russia so far have resisted tougher measures.

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