Iran has made clear its support for suicide bombings in Israel
It finds that Iran's Revolutionary Guards and intelligence ministry are directly involved in planning and supporting terrorist acts.
There was no immediate response from Tehran which is locked in a row with the US over its nuclear programme.
The report also argues that al-Qaeda had been weakened.
The US report says other state sponsors of terrorism include Libya, North Korea, Sudan, Syria and Cuba.
Cuba, for example, is accused of harbouring members of Spain's Eta militant group and Colombian leftist rebel groups.
Iraq, the report adds, is "not currently a terrorist safe haven" although Islamist militant groups view it "as a potential safe haven and are attempting to make it a reality".
The international community's actions have degraded the core al-Qaeda leadership group
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BBC State Department correspondent Jonathan Beale says that, by highlighting successes in disrupting the al-Qaeda network, the US hopes to convey the message that it is winning the war on terror.
But the dramatic rise in the number of terrorist attacks paints a very different picture, our correspondent adds, even though the US puts that down to a new broader definition of what is a terrorist attack.
Other findings include:
Last year saw 11,000 terror attacks worldwide and 14,600 deaths, 8,300 of them in Iraq
Suicide attacks increased in several countries and caused more than a fifth of all terror deaths worldwide
The number of terror victims in Israel was 50 - half the total calculated by the US for 2004
Safe havens for terrorists include the Afghan border, the Celebes Sea in South-East Asia, Somalia; and the intersection of Argentina, Paraguay and Brazil
'Years of war ahead'
"The international community's actions have degraded the core al-Qaeda leadership group," the report says.
"Its core leadership no longer has global command of its network."
There is evidence, the report continues, that core leaders such as Osama Bin Laden and Ayman al-Zawahri are "somewhat frustrated by their lack of direct control".
However, the report also argues that current terror groups are looser networks and therefore could pose greater danger.
America, it says, is in "the first phase of a potentially long war".
"The enemy's proven ability to adapt means we will go through several more cycles of action/reaction before the war's outcome is no longer in doubt," the US report says.
"It is likely we will have a resilient enemy for years to come."
Seal of the U.S. State Department.
In the latest report published by the United States State Department, it accuses Iran of being the top state sponsor of terrorism.  The report contrasts Al-Qaeda's interest in "global jihad" against the interests which Iran is said to be sponsoring.  Iran's focus is explained as Israel, Iraq, and Afghanistan.

The report describes Iran's interest in Israel as, "encouraging anti-Israeli terrorist activity, rhetorically, operationally, and financially."  Supreme Leader Khamenei and President Mahmoud Ahmadinejad are accused of lauding terrorist attacks carried out by anti-Zionist groups.  The report notes that Iran's support for organisations involved in the Israel-Palestine conflict is not limited to Shia groups such as Hezbollah;  Hamas and others are, like most Palestinians, Sunni muslims.

Second, Iran is accused of playing a "destabilizing role in Iraq."  In particular, Iran's providing of IED to rejectionist groups in Iraq were mentioned in the State Department report.  The report also indicates that Iraq is "not currently a terrorist safe haven" but can become a "potential safe haven" for them.  Iranian officials deny that they are supplying weapons to Iraqi insurgent groups.

Third, Iran is said have aided the Taliban militarily according to General Peter Pace and other U.S. officials.  In Afghanistan, Iran gainsays a military role; it only acknowledges that it has helped with the reconstruction and revival of the Afghan economy.  

The Islamic Revolutionary Guards and Iran's intelligence ministry were specifically named in the coordination of the activities of the Iranian government abroad.

This statements of this State Department report are not novel.  In fact, in 2006, U.S. Defense Secretary Donald Rumsfeld said, "The Iranian regime is today the world's leading state sponsor of terrorism."

Many Iranian officials accuse the United States of terrorism and a raft of crimes in return and "Death to America" chants are a regular scene at Friday prayers throughout Iran.  

Ayatollah Ebrahim Amini, the 2nd deputy chair of the Assembly of Experts has, for instance, said,

Other countries on the state sponsors of terrorism list were Cuba, North Korea, Sudan, and Syria.