The report by Charles Duelfer, whose Iraq Survey Group was assigned by the president to hunt for weapons after the U.S. invasion, also said, however, that Saddam had the desire and intention to procure WMD and believed in them as a way to maintain power.
Duelfer said the U.S. intelligence failed in its assessment of Iraq's WMD program because U.S. analysts "were forced to make difficult decisions" and lacked sufficient "ground truth" because the United States had very little contact with Iraq and few intelligence sources inside the country.
Saddam Hussein also wanted the world to believe he had more WMD capability than he actually did, the inspector said.
According to Duelfer's report Saddam and his advisers believed that WMD helped Iraq win the 1980 - 1988 war with Iran. Saddam also reportedly deployed WMD and ordered his military commanders to use them if necessary to protect Baghdad during the 1991 Gulf War.
Duelfer, a former U.N. weapons inspector, said he personally thought there would be more weapons and WMD capability than were eventually found, but that Iraq's admission of U.N. inspectors in 2003 was a "key indicator" that it did not have large stockpiles.
The report said that between the 1991 Gulf War and the 2003 Iraq war, Saddam Hussein "chose" not to possess weapons of mass destruction in militarily significant amounts.
Duelfer said weapons investigations in Iraq were particularly difficult because Saddam's regime was careful to avoid keeping written records and had much experience evading U.N. inspectors.
"In the end only he knows all the vital points," Duelfer said in testimony before the Senate Armed Services Committee.
Duelfer told the senators that Saddam's "prime objective" and top priority after 1991 was the end of U.N. sanctions, which had dealt a severe economic blow to the regime and the country.
Duelfer said Saddam planned to begin development of WMD as soon as sanctions ended, but his plans were dashed when the September 11 attacks brought renewed interest in enforcing the sanctions.
"He clearly had ambitions in terms of weapons of mass destruction," Duelfer said.
Under questioning by senators Duelfer said the world was "at risk with Saddam Hussein in charge" of Iraq.
When asked whether Saddam could have been dislodged without military force, Duelfer said that sanctions, a military buildup, diplomatic isolation, and dropping revenue streams, forced the regime to accept weapons inspectors in 2003, but he believed those conditions were "not sustainable" over a long period of time.
Duelfer said his team did find evidence that Iraq was building prohibited ballistic missiles along with unmanned aerial vehicles and that Saddam had used "oil for food" revenue for military purposes.
Senator John Kerry's campaign issued a press release Thursday, which said the Duelfer report was "more evidence" that the president "misled the nation into war."
On the campaign trail Wednesday, President Bush stood behind his decision to invade Iraq.
"There was a risk, a real risk, that Saddam Hussein would pass weapons or materials or information to terrorist networks," Bush said at a campaign stop in Pennsylvania. "In the world after Sept. 11, that was a risk we could not afford to take."