Bush was speaking a day after a consensus National Intelligence Estimate (NIE) of all 16 US spy agencies said Iran
stopped its nuclear arms work four years ago.
The finding was in stark contrast to Bush's rhetoric on Iran and also to an intelligence estimate two years ago when US agencies said they believed Tehran was continuing its weapons development programme.
Bush said: "Iran was dangerous, Iran is dangerous and Iran will be dangerous if they have the know-how to make a nuclear weapon."
Iran's chief nuclear negotiator on Wednesday brushed off Bush's comments and said he hoped any future US intelligence report would say Tehran's nuclear plans had always been peaceful.
Saeed Jalili said: "Bush's remarks were not new. What is important is their official organisations admitted that Iran did not have non-peaceful activities."
Mehran Kamrava, a foreign policy expert from Georgetown University in Qatar, told Al Jazeera: "It is terrible for Bush [that he has] to admit he was mistaken.
"There is going to be a tremendous impact ... the EU and US have been working on a third round of sanctions ... that alliance will now be fractured.
"It will make it more difficult for him to rally support against Iran.
"What will change perhaps will be the rhetoric, it will be far more difficult to invoke 'World War Three' and more difficult to say Iran is a 'real and present danger' to the [Middle East] region."
Referring to the failure to find "weapons of mass destruction" in Iraq after the US-led invasion against Saddam Hussein, Kamraya said: "The US lost credibility after the Iraq invasion, but at the same time it is the only dominant world superpower ... many smaller countries rely on its support.
"It will continue to have significant sway in the UN ... and internationally, although it will no longer have credibility."
Seyed Mohammad Marandi, a political analyst from the University of Tehran, told Al Jazeera: "US credibility has been severely damaged.
"But .. [Bush] will continue a policy of animosity towards Iran."