Despite criticism over the U.S.-led war in Iraq, the Bush administration is not backing away from its pre-emptive strike-first policy against countries it perceives as hostile, and it pointed to Iran as a serious challenge.

The national security report -- an updated version of a report issued in 2002 -- says diplomacy is favoured as the first choice when dealing with the spread of nuclear and chemical weapons.

However, U.S. President George Bush writes in the report that if necessary "we do not rule out the use of force before attacks occur -- even if uncertainty remains as to the time and place of the enemy's attack."

The report also singles out Iran as the single biggest threat facing the United States.

In the report, Bush warns that diplomacy to halt Tehran's suspected nuclear weapons must prevail. He wouldn't say what might happen if international negotiations failed.

During a press conference Thursday afternoon, White House spokesman Scott McLellan defended Bush's policy against a reporter's claims that even advocating a strike-first policy violates international law.

"Pre-emption is a long-standing principal of American foreign policy," McLellan said. "It is also part of an inherent right to self defence. But what we seek to do is address issues diplomatically by working with our friends and allies and working with regional partners."

By example, McLellan listed Iran and North Korea as countries where the U.S. is attempting to use diplomacy to resolve significant disagreements.

Other key points in the report:

• The U.S. accuses North Korea of posing a serious nuclear proliferation threat.
• Bush criticized the lack of democratic freedoms in Russia and China.
• He called Syria a tyranny that harbours terrorists and sponsors terrorist activity.
• The report urges Hamas to recognize Israel, and denounce violence

The report, titled National Security Strategy, summarizes Bush's plans for protecting the United States. An earlier report released in 2002 detailed the administration's adoption of the pre-emptive strike policy.

In the report, Bush wrote that the consequences of an attack with weapons of mass destruction are so potentially devastating "we cannot afford to stand idly by as grave dangers materialize. ... The place of pre-emption in our national security strategy remains the same."

His comments come despite the fact that no weapons of mass destruction were ever found in Iraq, even though that was the main reason given for invading the country.

The current report outlines seven "despotic" states: Iran, North Korea, Syria, Cuba, Belarus, Burma and Zimbabwe, according to the BBC website.

However, it saved its harshest words for Iran.

"This diplomatic effort must succeed if confrontation is to be avoided,'' Bush wrote in the latest report.

Washington has repeatedly accused Iran of meddling in Iraq's affairs and of sending weapons and men to help insurgents in the country.

The U.S. also accuses Iran of using its civilian nuclear program as a cover to build atomic bombs. Tehran denies this.

The Bush administration is trying to convince Russia and China to back a proposed United Nations Security Council resolution demanding Iran end its uranium enrichment program.

With a report by The Associated Press