The startling admission has come from a senior White House official in an authorised statement to The Washington Post.
President Bush’s false accusation made in the State of the Union address last January was part of the so-called Weapons of Mass Destruction campaign to convince the American public to support the invasion and occupation of Iraq.
British Prime Minister Tony Blair is facing similar pressure in the UK over similar bogus intelligence claims about iraq's WMD programme.
"Knowing all that we know now, the reference to Iraq's attempt to acquire uranium from Africa should not have been included in the State of the Union speech," the White House statement said.
It effectively conceded that intelligence underlying the president's uranium-purchase claim was completely wrong, The Washington Post said.
The International Atomic Energy Agency had already dismissed the report about Iraq buying uranium from Niger as being based on forged documents, as early as last March.
But even former US Ambassador Joseph Wilson disclosed to the CIA that the report was false, after travelling to Africa to investigate as far back as October last year.
Controversy is raging in the United States, Britain and Australia over charges that the governments of the three countries manipulated intelligence about weapons of mass destruction to make the case for war against Iraq.
No evidence of such weapons has been found by the occupying forces in Iraq.
However, British Prime Minister Tony Blair insisted on Tuesday that he had been "totally" vindicated by the case he made for removing Saddam Hussein in the run-up to war against Iraq.
Blair questioned again
Blair's dodgy dossier - a
weapon of mass deception?
The UK PM has spent the morning answering questions from a parliamentary select committee about how he used intelligence before the invasion of Iraq.
He was asked whether the suggestion that Iraq could deploy chemical and biological weapons within 45 minutes was given too much prominence in a government dossier published in September 2002.
Blair said he did not concede at all that the intelligence at the time was wrong but he did admit the ‘dodgy dossier,’ which included an old student thesis, was a mistake.
But from the outset of the hearing, Blair dodged the faulty intelligence issue, saying: "I stand by that case totally. I am quite sure we did the right thing in removing Saddam Hussein.
He went on: "I have absolutely no doubt at all that we will find evidence of weapons of mass destruction programmes."
Oz premier chided over Iraq
Australia's government also came under renewed criticism on Tuesday for its decision to join the invasion of Iraq, after the British parliamentary report questioned the war's justification.
Opposition Labour Party leader, Simon Crean, said the British report highlighted concerns the three governments used misleading intelligence concerning Iraq's weapons programmes to justify the attacks unsanctioned by the international community.
Crean notably chided Prime Minister John Howard for repeating incorrect US reports about ousted Iraqi leader Saddam Hussein's alleged attempts to develop nuclear weapons.
"I think we have got to get to the bottom of this because Australians want a prime minister who tells the truth," Crean said.
An Australian probe began taking evidence into the issue last week and is scheduled to hold its first hearings late next month.