The State Department report added meanwhile that Al-Qaeda and associates "remained the greatest terrorist threat" to the US and its partners especially now that it has a "safe haven" in Pakistan's northwestern tribal areas.
Officials also said that "terrorist attacks" doubled last year in frontline US counter-terrorism ally Pakistan, mainly on its northwestern border with Afghanistan, and that they also rose in Afghanistan.
The State Department report said Iran remained last year both "the most active" and "most significant" state sponsor of terrorism, though it also listed Syria, North Korea, Cuba and Sudan as terrorism sponsors.
It said non-Arab Iran provides aid to Palestinian "terrorist" groups like Hamas, the Lebanese movement Hezbollah, "Iraq-based militants," and Taliban fighters in Afghanistan.
Iran aided such groups to advance their "common regional goals," according to the 2007 "Country Reports on Terrorism."
The report singled out "elements" of Iran's Islamic Revolutionary Guard Corps as being directly involved in the planning and support of terrorist acts throughout the region.
The Islamic republic of Iran uses terrorism abroad as a protection strategy, report said.
It believes it does so by "deterring United States or Israeli attacks, distracting and weakening the United States, enhancing Iran's regional influence through intimidation, and helping to drive the United States from the Middle East," it said.
It said Iran is a threat both to regional stability and US interests in the region because it backs groups that reject the Palestinian-Israeli peace process and "undercut the democratic process in Lebanon," it said.
State sponsors help terrorist groups obtain funds, weapons and materials, it said.
"More worrisome is that some of these countries also have the capability to manufacture weapons of mass destruction that could get into the hands of terrorists," it added.
"Sudan continued to take significant steps to cooperate in the War on Terror. Cuba, Iran, and Syria, however, have not renounced terrorism or made efforts to act against Foreign Terrorist Organizations," it said.
"Iran and Syria routinely provided safe haven, substantial resources, and guidance to terrorist organizations," it said.
It said North Korea "was not known to have sponsored any terrorist acts since the bombing of a Korean Airlines flight in 1987" but it still "harbored four Japanese Red Army members who participated in a jet hijacking in 1970."
In its 2006 report, the State Department also listed Iran, Syria, Cuba, North Korea and Sudan as state sponsors of terrorism.
The report also said "Al-Qaeda and associated networks remained the greatest terrorist threat to the United States and its partners in 2007."
It added that Al-Qaeda has "reconstituted some" of the operational capabilities it had before the September 11, 2001 attacks in New York and Washington by exploiting Pakistan's Federally Administered Tribal Areas.
The State Department report showed that "terrorist" attacks in Afghanistan rose to 1,127 in 2007, up from 969 the previous year.
Though he gave no figures, Deputy Director of the National Counterterrorism Center Russ Travers told reporters after the report was published that the number of attacks in Pakistan doubled and the number of fatalities quadrupled.
He said most of the attacks occurred in areas of northwestern Pakistan outside the control of US ally President President Pervez Musharraf.
"Portions of the Federally Administered Tribal Areas (FATA) and the North-West Frontier Province (NWFP) of Pakistan have become a safe haven for AQ terrorists, Afghan insurgents, and other extremists," the report said.
