A consensus National Intelligence Estimate (NIE) of all 16 US spy agencies said Iran stopped its nuclear arms work four years ago.
Saeed Jalili, Iran's nuclear negotiator, also expressed confidence over the future of the country’s nuclear programme.
It, however, said Iran was continuing to develop the technical means that could be applied to producing weapons.
Tehran insists its nuclear programme has never had any military goals.
In response to the report, George Bush, the US president, said Iran remained a danger if it mastered the knowledge to make a nuclear weapon.
Buoyed by the US report, Ahmadinejad said Iran would not roll back its nuclear programme.
"If you want to start a new political game, the united Iranian nation will resist you and will not retreat one step from its programme," he said.
"We will continue our nuclear programme and we will not give it up."
Ali Reza Ronaghi, Al Jazeera's correspondent in Tehran, said the Iranians held the belief that they were right from the beginning.
He said: "Many have said that Bush and the United States are the main losers following the publication of the report."
"The president [Ahmadinejad] also said that if Western powers continue to insist that Iran poses a threat, it is not Iran's problem."
Jalili said the report showed Iran had been right to insist its nuclear programme was peaceful.
Asked if the report would improve the conditions for resolving the nuclear standoff, Jalili said: "Normally it should be this way."
"After the report of Mohamed El-Baradei [director-general of the International Atomic Energy Agency (IAEA)] and this report, the justice of the Iranian position has been confirmed."
El-Baradei, whose inspectors have been investigating Iran's nuclear programme for four years, called for immediate negotiations between Iran and its western critics.
'Still a threat'
But Bush was adamant that Iran is still a threat.
Bush on Tuesday said: "Iran was dangerous, Iran is dangerous and Iran will be dangerous if they have the knowledge necessary to make a nuclear weapon."
"The best diplomacy, effective diplomacy, is one in which all options are on the table."
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'll 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."Sanctions setback
A diplomat to the UN Security Council, asking to remain anonymous, confirmed the six world powers were expecting to soon begin work on drafting a resolution for new sanctions against Tehran to go before the council.
But Wang Guangya, the Chinese ambassador to the UN, said the six powers' bid for new sanctions against Iran could be called into question by the US intelligence assessment.
He said: "I think Council members will have to consider that, because ... now things have changed."
China and Russia have been reluctant to join UN sanctions actions against Iran.Israeli doubts
Israel, the only country in the Middle East believed to have a nuclear arsenal, questioned the findings of the US National Intelligence Estimate, saying that efforts to curb Iran's nuclear programme should continue regardless.
Ehud Barak, Israel's defence minister, told Army Radio that
as far as Israel knew, Iran had probably renewed its weapons programme since 2003.
Ehud Olmert, Israeli prime minister, said that he would continue to push the US and other allies move to halt Tehran's nuclear programme.
"It is vital to pursue efforts to prevent Iran from developing a capability like this and we will continue doing so along with our friends the United States," he said.
Source: Al Jazeera and agencies