Rumsfeld said the US went to war because it saw existing information on Iraqi arms programmes in a new light after the September 11, 2001 attacks.
"That experience changed our appreciation of (the) vulnerability the US faces from terrorist states and terrorist networks armed with powerful weapons," he added.
He was speaking to a senate subcommittee a day after the White House acknowledged that allegations about Iraq trying to buy uranium from Niger were based on forged documents.
The White House statement added fuel to the controversy over whether the US and British governments manipulated intelligence about weapons of mass destruction to make the case for war against Iraq.
"At the time, the national intelligence estimate on Iraqi weapons of mass destruction referred to attempts by Iraq to acquire uranium from several countries in Africa," said Michael Anton, a spokesman for the White House National security council said on Tuesday.
"We now know that documents alleging a transaction between Iraq and Niger had been forged," Anton said.
Bush included the allegation in his State of the Union speech in January.
"President Bush's factual lapse in his State of the Union address cannot be simply dismissed as an intelligence failure," House Representative Dick Gephardt, a Missouri Democrat who is running for president, said in a statement.
Gephardt has called for a Congressional investigation into war-related intelligence operations
Credibility eroded, say critics
"It's a recognition that we were provided faulty information," said Senate Minority Leader Tom Daschle.
"And I think it's all the more reason why a full investigation of all of the facts surrounding this situation be undertaken – the sooner the better," he said.
Another Democrat, Representative Dennis Kucinich of Ohio, said the case "erodes the credibility of the administration."
"It's a recognition that we were provided faulty information"
Senate Minority Leader
A British parliamentary commission report also raised questions about the reliability of British intelligence cited by Bush in his 28 January speech.
In March, the International Atomic Energy Agency dismissed a report about Iraq buying uranium from Niger as being based on forged documents.
Former US Ambassador Joseph Wilson admitted he had travelled to Africa in 2002 to investigate the report.
Wilson, Washington's envoy to Gabon from 1992 to 1995, wrote in The New York Times and told NBC on Sunday that he had reported back to the CIA that it was highly doubtful any such transaction had ever taken place.
A US intelligence official said Wilson was sent to investigate the Niger reports by mid-level CIA officers, not by top-level Bush administration officials.
There is no record of his report being flagged to top level officials, the intelligence official said.