Intelligence officials said the threat from al-Qaeda has increased as the network responsible for the September 11 attacks had become entrenched and gained strength in remote northwestern Pakistan.
The safe haven has enabled Osama bin Laden and his second-in-command, Ayman al-Zawahri, to regain some command abilities lost when US-led forces drove them from Afghanistan in late 2001, officials said.
The report said al-Qaeda remained "the most serious terrorist threat" to the United States.
"As a result, we judge that the United States currently is in a heightened threat environment," it said.
The report comes nearly six years after Bush said he would get bin Laden "dead or alive".
Iraq war 'mishandled'
The White House, however, said there was no credible indication of an imminent attack, and the nation's alert status was unchanged at an elevated level.
But Democrats seized on the findings to say the administration has mishandled national security and the war in Iraq.
"The Bush administration's national security strategy has failed in its most basic responsibility," said senate majority leader Harry Reid, a Democrat."
Edward Kennedy, a senator and staunch critic of George Bush, the US president, said: "... the administration turns a deaf ear to all the voices calling for change and continues to plead for more and more time to pursue its failed strategy in Iraq."
Republicans in congress said the report demonstrated the need to keep US troops in Iraq and to maintain vigilance at home.
Bush has insisted that his so-called "war on terror" had dealt a blow to al-Qaeda.
He said at the White House, "Al-Qaeda is strong today, but they're not nearly as strong as they were prior to September 11, 2001, and the reason why is, is because we've been working with the world to keep the pressure on, to stay on the offence".