He said Al Qaeda continues to plan attacks in Bahrain, Saudi Arabia, the UAE and Yemen – warning the group’s presence in Lebanon was also growing.
The retired US Navy Vice-Admiral serves as the principal advisor to President George W Bush, the National Security Council and the Homeland Security Council on intelligence and national security issues.
His report says Al Qaeda’s leadership is based in the border area of Pakistan, from where it poses the most dangerous threat to the war on terrorism.
"The Federally Administered Tribal Areas (FATA) serve as a staging area for Al Qaeda’s attacks in support of the Taliban in Afghanistan, as well as a location for training new terrorist operatives for attacks in Pakistan, the Middle East, Africa, Europe and the US," said Vice-Admiral McConnell.
He said a national intelligence estimate last year showed the group had been able to regroup and plan for new attacks in safe havens within Pakistan’s tribal areas.
He said groups affiliated with Al Qaeda also continue to operate in Indonesia and in the Philippines.
The report states the number of Al Qaeda attacks in Iraq dropped by more than half by the end of last year and its strikes against Muslims in Iraq had tarnished its image and reduced support among radicals.
However, it says the group continues to pose significant threats to the US and its allies.
"Over the past year, a number of religious leaders and fellow extremists who once had significant influence with Al Qaeda have publicly criticised it and its affiliates for the use of violent tactics," said Vice-Admiral McConnell.
"We see indications that Al Qaeda’s global image is beginning to lose some of its lustre, nonetheless, we still face multi-faceted terrorist threats."
He said conventional explosives were still Al Qaeda’s most likely style of attack, but warned it would continue its efforts to acquire nuclear weapons.
"Al Qaeda and other terrorist groups are attempting to acquire chemical, biological, radiological and nuclear weapons and materials," he said.
"We assess that Al Qaeda’s homeland plotting is likely to continue to focus on prominent political, economic and infrastructure targets designed to produce mass casualties, visually dramatic destruction, significant economic aftershocks and/or fear among the population."
Bahrain Foreign Ministry and Interior Ministry officials were yesterday unavailable for comment.