Washington still considers state-sponsored terrorism a grave problem, but Secretary of State Madeleine Albright says "direct government involvement in committing such acts continues to decline".

Even so America says there are seven countires on its list of "state sponsors of terrorism": Cuba, Iran, Iraq, Libya, North Korea, Sudan and Syria.

Albright: 'Governments must stop supporting terrorism'

The list remains unchanged since 1993, although the report says that Cuba, Libya, Syria and North Korea were not directly involved in acts of international terrorism in 1998, nor even in the 1990s in some cases.

'One-man terror state'

On the other hand, the Saudi dissident Usama Bin Laden and his "broad-based, versatile" extremist organisation merit a section of their own in the report for 1998.

Bin Laden: Indicted for embassy attacks

"Progress has been countered by the rise of terrorist groups that are less directly dependent on states", Mrs Albright said.

According to the US definition of terrorism, 741 people were killed and nearly 6,000 were injured in terrorist incidents in 1998. Most of the casualties were the result of the bombing of US embassies in Kenya and Tanzania in August.

A US court has indicted Mr Bin Laden in connection with these attacks.

Uncorroborated claims

Iraq is said to be trying to rebuild its intelligence network, "which it previously had used to support international terrorism."

But the report quotes press reports and uncorroborated claims by "Iraqi oppositionists" as evidence of terrorist activity.

Sudan is described as a "meeting place, safe haven and training hub" for a number of international terrorist groups and for Usama Bin Laden's group in particular.

The report also refers to the bombing by US forces on 20 August 1998 against the al-Shifa pharmaceutical factory in Khartoum, "to prevent an anti-US attack" using chemical weapons, which the US believed were being made there.

The report acknowledges that "Sudan has denied that the plant was involved in chemical weapons production and vigorously has protested the US bombing".

State Department officials are reported to have indicated that Cuba could remove itself from the list without much difficulty, by cutting links with other alleged state sponsors of terror, and no longer providing a safe haven for US terrorist fugitives.

Non-practising terror states

Meanwhile, the report says Syria has not "engaged directly in planning or executing" terrorism since 1986, North Korea "has not been linked definitively" to any terrorist act since 1987.

There is also "no evidence of Libyan involvement" in recent terrorist acts.

They remain on the US list mainly because they still harbour terrorist groups, the report says.

US pressure

Critics of the list say it is more to do with US foreign policy towards the countries included on it, than so-called terrorist activity.

It is widely assumed by analysts that Syria, for instance, would be taken off the list if it signed a peace deal with Israel, Washington's main ally in the Middle East.

Iran

The most direct criticism is reserved for Tehran, although the report notes some improvements, and acknowledges that Iran has been a victim of terrorism as well.

"Iran in 1998 continued to be involved in the planning and execution of terrorist acts," the report says. But "it apparently conducted fewer assassinations abroad in 1998 than in 1997".