Iranian government officials and lawmakers said the National Intelligence Estimate, released Monday by the combined U.S. intelligence community, was a blow to the George W. Bush administration's campaign that had portrayed Iran as a nuclear threat and its efforts to seek tougher sanctions on the Islamic republic.

Bush warned in October of a "nuclear holocaust" and a third world war if the international community allowed Tehran to pursue its nuclear program.

Iranian Foreign Minister Manouchehr Mottaki said Tuesday it was "natural" to welcome the U.S. report "when those countries who in the past had questions and ambiguities about this case."

"The condition of Iran's peaceful nuclear activities is becoming clear to the world," Mottaki told state radio.

Foreign Ministry spokesman Muhammad Ali Hosseini said the report, compiled by 16 U.S. spy agencies, "proves that Bush's statements – which always speak of the serious threat of Iran's nuclear program – are unreliable and fictitious."

But he also disputed the report's suggestion that his country had been seeking nuclear weapons before 2003. "We did not have any such activities to stop them in 2003," he told state TV.

Some officials took the report's findings as an opportunity to ease the Western pressure on Iran in recent years and called for a U.S. apology, compensation, and revoking the two sets of sanctions imposed by the U.N. Security Council.

"Americans have hurt the Iranian nation a lot by spreading lies against the Islamic republic and disturbing the public mind," said government spokesman Gholam Hossein Elham, who described the report as an "American confession" and demanded the U.S. pay damages.

Elham Aminzadeh, who sits on the Iranian parliament's national security committee, said that "U.S. statesmen must apologize to the Iranian people who have been upset by their propaganda and psychological warfare." She also called for the U.N. Security Council to lift the sanctions and "return Iran's case to the International Atomic Energy Agency."

Officials in Tehran said the intelligence's findings, which said Washington's allegations about Iran's nuclear goals have been exaggerated for at least two years but predicted it could have the capability to make an atomic weapon by 2015, fall in line with the international atomic watchdog reports.

The IAEA said Tuesday the U.S. intelligence report validates its own assessment in recent years that its inspectors have not found "concrete evidence of an ongoing nuclear weapons program or undeclared nuclear facilities in Iran," according to IAEA chief Mohamed ElBaradei. He said Tuesday the new U.S. assessment "should defuse the current crisis."

Iranian officials believe the latest intelligence report set the record straight after a 2005 NIE report had warned that Iran was developing nuclear weapons, saying the U.S. intelligence services had always known the Islamic republic was not building an atomic bomb but wanted to fabricate a case to justify possible military strikes on the country.

Monday's report was supposed to have been released last spring but critics suggest it was delayed to avoid repeating the Iraq mistake when U.S. intelligence amplified Saddam Hussein's alleged weapons of mass destruction that was used to justify the U.S.-led invasion in March 2003.

The report said Iran was not a rogue regime, but a rational country where "decisions are guided by a cost-benefit approach rather than a rush to a weapon irrespective of the political, economic, and military costs."

Iranian lawmaker and head of parliament's foreign policy and national security committee, Alaeddin Borouerdi, told state television he believed that "from the beginning, American intelligence organizations knew Iran did not have deviations" from peaceful nuclear aims.

He also said the NIE report would undermine those trying to increase pressure on his country and strengthens the Russian and Chinese positions that seek to resolve Iran's nuclear crisis with the international community without adding sanctions.

China and Russia – members of the permanent Security Council that also includes the U.S., France, and Britain – are resisting tougher sanctions on Iran, saying they would be counter-productive to resolving the crisis, and generally support Tehran's development of peaceful nuclear technology.

However, the West is expected to continue to pressure Iran to stop its uranium enrichment as the Europeans stated that the NIE findings justify their "dialog-pressure" approach with Iran and will continue with the same policy.

The U.S. intelligence report is not shaking the Bush administration's policy to use military threats against Iran, as Bush said at the White House Tuesday that the military option will remain "on the table" because Tehran continues to pose a nuclear threat. But Iran appears comfortable enough that this report will be its ticket out of a military confrontation – at least for now.