The report singles out Iran as being 'the most active state sponsor of terrorism', adding weight to President Bush's naming of Iran as being part of an 'axis of evil' in January. The State Department claims that Iran has persisted in supplying Palestinian and Lebanese groups with finance and arms which have been used to attack Israel.

However, the report states that significant steps have been taken by Libya and Sudan and their levels of support for international terrorism have declined.

The GCC states are praised for playing 'strong roles in the international coalition against terrorism.these governments took positive steps to halt the flow of terrorism financing and, in some cases, authorised basing and/or overflight provisions. In several cases they did so despite popular disquiet over their government's military support for Operation Enduring Freedom.'