Washington's policies of promoting democracy in Iraq and elsewhere look "increasingly effective", and even the threat from terrorism abated slightly during 2004, the International Institute for Strategic Studies said in an annual report.
The London-based think-tank noted however that the situation in Iraq was also creating a recruitment effect for terrorist groups, an aspect which remained "the proverbial elephant in the living room" of US foreign policy.
The report said Tuesday that the improvement in the overall strategic climate was helped by factors such as the death of Palestinian leader Yasser Arafat, but it added that US President George W. Bush's foreign policies also seemed to be bearing fruit.
"Even though the Bush policy was bold, controversial and sometimes divisive, his aggressive global agenda of promoting freedom, and democracy appeared increasingly effective," the IISS said in its 384-page "Strategic Survey 2004-05".
Counter-terrorism efforts over the period had also seen an overall net gain, the report argued, despite the seemingly "counterproductive" aspects of some of the United States's self-declared "war on terror".
The US-led occupation of Iraq focused the worries of many Muslims worldwide and made them "more easily seduced by Osama bin Laden's arguments", the think-tank said, referring to the Al-Qaeda leader.
Additionally, the massive US military commitment to Iraq had drained resources from other areas more closely associated with terrorism, such as Afghanistan.
"From Al-Qaeda's point of view, Bush's Iraq policies have arguably produced a confluence of propitious circumstances: a strategically bogged-down America hated by much of the Islamic world and regarded warily even by its allies," the IISS said.
Nonetheless, Al-Qaeda and the global Islamic terrorist movement remained "physically and ideologically in flux".
Al-Qaeda's expulsion from Afghanistan had lost the group its main base, while the positive use of diplomatic "soft power" by the United States and its allies to combat terrorists was growing.
The robustness of US efforts to establish democracy in Iraq, coupled with renewed hopes for Middle East peace following Arafat's death in November 2004, "allowed for a more optimistic counter-terrorism outlook than did circumstances at the end of 2003", the IISS concluded.
This is in stark contrast to the think-tank's warning in its previous Strategic Survey a year ago that the Madrid train bombings of March 2004 appeared to indicate that Al-Qaeda "had fully reconstituted".
Elsewhere in this year's report, the IISS noted that Iran had appeared impervious to "good cop, bad cop" pressure from the European Union and the United States to stop its nuclear programme, although Tehran's elections next month could see a change.
And while North Korea's remained recalcitrant over its own self-professed nuclear ambitions, even this had some positive points for Washington, the report said, in pushing Japan, South Korea and China closer towards US thinking on Pyongyang.
On a more general level, the international scene was different thanks to a change in US policy following George W. Bush's re-election as president, and a realisation in Washington that the "aggressive entrepreneurship" on the world stage of US ideals was not always helpful.
International diplomacy during Bush's second term looked set to be "considerably less turbulent and polarising than it was in his first", the IISS argued.
"Overall, Bush appeared to learn from the Iraq experience that even the United States could not do anything it wanted -- certainly not without the help of its allies, partners and sometimes even multinational institutions."
