The National Intelligence Estimate, declassified by the US president on Tuesday, also questions whether the US is winning its global "war on terror".
"The Iraq conflict has become the 'cause celebre' for jihadists, breeding a deep resentment of US involvement in the Muslim world and cultivating supporters for the global jihadist movement," the report said.
The document, parts of which were leaked to the US media before George Bush made its main conclusions public, represents the consensus view of 16 US spy agencies.
It said that the number of self-described "jihadists" was globally "increasing both in number and geographic dispersion".
This made them "harder to find and undermine" and that this could mean "increasing attacks worldwide," the report, first published in April, said.
The report also said factors "fuelling the spread of the movement" would remain in place for at least five years.
The report found that the US-led "war on terror" had "seriously damaged" Osama bin Laden's al-Qaeda group.
Yet it also revealed that Bush, who maintains that the war in Iraq has made the US safer, was warned by intelligence agencies in April that the conflict was acting as a de-facto recruiting sergeant for militant Islamist groups.
Foreign jihadists have joined
militia groups in Iraq
The document said, "Perceived jihadist success there would inspire more fighters to continue the struggle elsewhere," but added, "... should jihadists leaving Iraq perceive themselves and be perceived to have failed, we judge fewer fighters will be inspired to carry on the fight."
Bush had ordered that main parts of the assessment made public after leaked weekend media reports cited US officials as saying that it concluded that the Iraq war had made global terrorism worse.
The US president blasted those reports as stemming from politically motivated leaks, while opposition Democrats rushed to embrace them as ammunition before November 7 elections that will decide control of the US Congress.