WASHINGTON, June 16: There's no credible evidence to suggest that the former Iraqi government collaborated with Al Qaeda on any attacks in the United States, says a panel report released on Wednesday.

The 10-member bipartisan commission, formed to investigate the 9/11 attacks in the United States, reports that although Al Qaeda chief Osama bin Laden explored possible cooperation with the deposed Iraqi president Saddam Hussein, the Iraqi leader showed no interest.

The White House had initially opposed the creation of a bipartisan commission and attempted to limit the panel's access to documents and witnesses related to 9-11 but later changed its attitude.

And as the administration had feared, the commission's findings are sharply critical of its anti-terrorism policies, also point out the mistakes it made in dealing with terrorism before 9/11.

The panel reports that Osama made at least two attempts to seek Saddam Hussein's patronage, although he opposed Iraq's secular policies. In 1994, when Osama was in Sudan, the Sudanese government arranged a meeting with a senior Iraqi intelligence official and the Al Qaeda chief requested permission to establish training camps in Iraq and also demanded weapons for his followers.

But Iraq turned down the request, the US report said. Osama lived in Sudan from 1991 to 1996 when the United States forced the Sudanese government to exile, him to Afghanistan.

"There have been reports that contacts between Iraq and Al Qaeda also occurred after bin Laden had returned to Afghanistan, but they do not appear to have resulted in a collaborative relationship," the report said. "Two senior (Osama) bin Laden associates have adamantly denied that any ties existed between Al Qaeda and Iraq."

BUSH BELIED: The findings contradict recent statements by President George W. Bush and Vice President Dick Cheney who reiterated their claims that Saddam Hussein had long-standing ties to Al Qaeda.

The 9/11 panel, which opened its last two-day round of hearings on Wednesday morning and includes members from the both Republican and Democratic parties, said: "We have no credible evidence that Iraq and Al Qaeda cooperated on attacks against the United States."

The findings were included in the first of three staff reports the commission plans to release this week. The report, entitled "Overview of the Enemy", says Al Qaeda has changed drastically since Sept 2001. It has become more decentralized, though it still helps regional networks carry out terror attacks and assists in training and funding.

It has also not withered in its mission to strike again in the United States to inflict mass casualties. "The intelligence community expects that the trend toward attacks intended to cause ever-higher casualties will continue," the report said.

The commission warns that Al Qaeda's ability to conduct an anthrax attack is one of the most immediate threats facing the United States. The group may also try an attack using industrial chemicals, or by attacking a chemical plant.

"Al Qaeda remains extremely interested in conducting chemical, biological, radiological or nuclear attacks," said the report. Quoting intelligence sources, the panel says that Al Qaeda previously planned to carry out the hijackings earlier in May or June of 2001 but later delayed it to September 11.

The initial 12-page report is a broad examination of the history of Al Qaeda and Osama, who views the United States as "the head of the snake" because of its support for Israel and Arab regimes he considers corrupt.

The report says that Osama was intent on carrying out attacks on the United States as early as 1992 but US officials were not aware of these plans until four years later.

FUNDING: "Contrary to popular understanding," the report says, "(Osama) bin Laden did not fund Al Qaeda through a personal fortune and a network of businesses," and he never received a 300 million dollars inheritance. "Instead, Al Qaeda relied primarily on a fundraising network developed over time," the report says.

In 1998, the suicide truck bombings of the US embassies in Kenya and Tanzania - which killed 224 people and injured more than 5,000 combined - marked a new departure in that "they were planned, directed and executed by Al Qaeda, under the direct supervision of bin Laden and his chief aides", the report says.

Since the Sept 11 attacks and the ouster of the Taliban in Afghanistan, "Al Qaeda's funding has decreased significantly," the report says. But the group's expenditures have decreased as well, and "it remains relatively easy for Al Qaeda to find the relatively small sums required to fund terrorist operations," the report warns.

Now, the organization is far more decentralized, with operational commanders and cell leaders making the decisions that were previously made by Osama, the panel found.

PAKISTAN'S ROLE: The report accused Pakistan of helping the Taliban give a haven to Al Qaeda in the face of international pressure, agencies add. The report said Pakistan broke with the Taliban only after Sept 11, even though it knew the Afghan militia was hiding Al Qaeda chief Osama bin Laden.

"The Taliban's ability to provide (Osama) bin Laden a haven in the face of international pressure and UN sanctions was significantly facilitated by Pakistani support," the report said.