The number of people killed around the world in terror attacks rose by 40% last year to more than 20,000, the US State Department has said.
Most terror attacks and deaths are in Iraq, the report says
The increase is mostly due to greater violence in Iraq the State Department's annual report on terrorism says.
Iran is listed as the world's biggest state sponsor of terrorism, supporting extremist groups throughout the Middle East but particularly in Iraq.
Venezuela is criticised for allowing Colombian rebels to use its territory.
The number of attacks in Iraq nearly doubled to 6,630, accounting for 45% of the global total.
Iraq alone accounts for nearly two-thirds of all terrorism-related deaths last year.
The numbers do not include attacks on US or other coalition troops in the country.
In the latest violence, a suicide bomber wearing a vest packed with explosives killed 32 people and himself at a Shia funeral in Khalis, north of Baghdad in Diyala province.
GLOBAL TERROR REPORT 2006
40% increase in deaths to 20,498
28% increase in attacks to 14,338
Iraq: 65% of all deaths
700 children killed, 1,100 wounded
Source: US State Department
Iran is playing a "destabilising role" in Iraq, supporting Shia militias that have attacked Sunnis, as well as US and British forces, the report says.
The report also points to "militias and death squads increasingly engaged in sectarian violence and criminal organisations taking advantage of Iraq's deteriorating security situation."
The number of attacks also took a large jump in Afghanistan.
Syria is named as the number two state supporter of terrorism, followed by Cuba, North Korea and Sudan.
Children were increasingly the victims of terror attacks last year. As many as 700 children were killed and 1,100 wounded - an increase of 80%.
The report, put together by the US National Counterterrorism Center says that al-Qaeda is adapting to counter-terror measures.
"Although we have killed or captured numerous senior al-Qaeda operatives," said the NCTC's director Frank Urbancic, "al-Qaeda's core elements are resilient and they remain the immediate national security threat."
The report also repeated allegations from previous years that the Venezuelan government allows the Colombian left-wing rebel groups Farc and ELN to use its territory as a safe haven.