April 5 (Bloomberg) -- Defense Department officials ``undercut'' the U.S. intelligence community when making a case to White House officials that Iraqi dictator Saddam Hussein had a close relationship with the al-Qaeda terror network, the Pentagon inspector general said in a declassified report.

Analysts reporting to former Undersecretary for Policy Douglas Feith told then-Deputy National Security Adviser Stephen Hadley and Lewis Libby, the vice president's chief of staff, that there were ``fundamental problems with how the intelligence community is assessing information,'' the report shows.

The report concludes the Pentagon provided ``inappropriate'' analysis for its finding of a strong link between Hussein and al- Qaeda -- a finding that Vice President Dick Cheney cited as a rationale for invading Iraq along with the need to disarm the nation of weapons of mass destruction.

The criticism of the intelligence community is one of several on a slide used in the Sept. 16, 2002, White House briefing.

``The slide undercuts'' the CIA and other intelligence agencies, Acting Inspector General Thomas Gimble said in a letter to Senator Carl Levin of Michigan, chairman of the Armed Services Committee, who released the report today.

Inclusion of the slide -- that was omitted from an earlier briefing with then-CIA Director George Tenet -- ``clearly did not bolster support for the intelligence community,'' Gimble wrote.

Authorized by Rumsfeld

The 121-page report released today was summarized by Gimble at an Armed Services Committee hearing Feb. 9. The report was declassified at Levin's request.

Gimble told the committee that the actions of Feith and his subordinates were authorized by then-Defense Secretary Donald Rumsfeld and his deputy, Paul Wolfowitz.

Levin, in a statement today, said the analysis from Feith's office ``was not supported by available intelligence and was contrary to the consensus view of the intelligence community'' yet was ``used by the administration to support its public arguments in its case for war.''

The slide used by the Pentagon analysts to brief the White House officials states that the intelligence agencies assumed ``that secularists and Islamists will not cooperate, even when they have common interests,'' and there was ``consistent underestimation of importance that would be attached by Iraq and al-Qaeda to hiding a relationship.''

``The intelligence community never found an operational relationship between Iraq and al-Qaeda,'' Levin said. ``The report specifically states that `the CIA and DIA disavowed any `mature, symbiotic' relationship between Iraq and al-Qaeda.''

Fodder for Cheney

Gimble, in his report, drew a direct connection between the Sept. 16 White House briefing and Cheney's public comments thereafter.

Four days later, Cheney referred at fundraiser to a ``well- established pattern of cooperation between Iraq and terrorists.''

And on Dec. 2, Cheney warned in a speech that Hussein's regime ``has had high-level contact with al-Qaeda going back a decade and has provided training to al-Qaeda terrorists.'' His language mirrored that on briefing chart entitled ``Summary of Known Iraq-al-Qaeda Contacts -- 1990-2002.''

And Gimble noted that Cheney, in an interview in January 2004, nine months after the March 2003 invasion, praised as ``your best source of information'' on the alleged Iraq-al-Qaeda link a memo compiled by the Pentagon analysts that was cited in the Weekly Standard, a magazine that supported the war.

Pentagon Response

The Pentagon, in written comments included in the report, strongly disputed that the White House briefing and slide citing ``Fundamental Problems'' undercut the intelligence community.

``The Intelligence Community was fully aware of the work under review and commented on it several time,'' the Pentagon said, adding that Tenet, at Rumsfeld's suggestion, ``was personally briefed.''

The analysts' appraisal of the intelligence community was in contrast to that of the Senate Select Committee on Intelligence in its 2004 report on pre-war intelligence. That committee praised the CIA's approach to assessing a possible link between Hussein and al-Qaeda as a ``methodical approach for assessing a possible Iraq/al-Qaeda relationship'' that was ``reasonable and objective,'' Gimble wrote.

The Pentagon policy offices set up by Feith have been abolished and Feith has left the Pentagon and is writing a book on the war. Gimble said establishment of the Office of the Director of National Intelligence will preclude a reoccurrence of the inappropriate conduct.

To contact the reporter on this story: Tony Capaccio at acapaccio@bloomberg.net

Last Updated: April 5, 2007 16:53 EDT