Investigators have found no evidence that Iraq aided al-Qaida attempts to strike the United States, says the US commission investigating the 11 September 2001 attacks
The report by commission staff said al-Qaida leader Usama bin Ladin met a senior Iraqi intelligence officer in 1994 and explored the possibility of cooperation, but the plans apparently never came to fruition.
US President George Bush and Vice President Dick Cheney this week reiterated pre-war arguments that an Iraqi connection to al-Qaida, which is blamed for the 11 September attacks, represented an unacceptable threat.
However, the US government-established commission said in a staff report: "We have no credible evidence that Iraq and al-Qaida cooperated on attacks against the United States."
"There is no convincing evidence that any government financially supported al-Qaida before 9/11 - other than limited support provided by the Taliban after bin Ladin first arrived in Afghanistan," it added.
Counterterrorism officials from the FBI and CIA testifying at Wednesday's hearing said they agreed with the staff report's conclusion.
Democratic presidential candidate Senator John Kerry and other congressional Democrats seized on the news to attack the Bush administration as part of their campaign to unseat the president in November.
"The administration misled America," Kerry said. "I believe that the 9/11 report, the early evidence, is that ... we didn't have the types of terrorist links that this administration was asserting. I think that's a very, very serious finding."
Presidential hopeful John Kerry
says Bush misled Americans
The report was issued at the start of the commission's final two days of public hearings into the hijacked-plane attacks.
The report stood in contrast to comments this week by Vice President Dick Cheney, who said that ousted Iraqi leader Saddam had "long-established ties" to al-Qaida.
Bush, asked on Tuesday about Cheney's comments, cited the presence in Iraq of alleged terrorist Abu Musab al-Zarqawi as "the best evidence" of an Iraqi connection to al-Qaida.
In a report entitled Overview of the Enemy, the commission said al-Qaida had changed drastically and become decentralised since the 2001 attacks, but it still helped regional networks and would keep trying to strike the US.
"Al-Qaida remains extremely interested in conducting chemical, biological, radiological or nuclear attacks," said the report.
The CIA estimates al-Qaida spent $30 million a year before the 2001 attacks for hostile operations, to run the training camps and contribute to Afghanistan's Taliban militia.
While it found no convincing evidence of government support, the panel said Saudi Arabia provided "fertile fund-raising ground" for al-Qaida.
A second panel report on Wednesday said there was no evidence Princess Haifa al-Faisal, the wife of Saudi ambassador to Washington Prince Bandar bin Sultan, had contributed any funds to the conspiracy.
The FBI has examined whether some of her charitable donations ended up with the hijackers.