Iran "continues to leverage cyber espionage, propaganda, and attacks to support its security priorities, influence events and foreign perceptions, and counter threats-including against US allies in the region", Coats testified.
Coats appeared before the Senate committee along with other intelligence agency leaders, including CIA Director Mike Pompeo and National Security Agency Director Mike Rogers.
The U.S. intelligence community is comprised of 17 federal agencies.
Unlike during his confirmation hearing, Coats on Thursday did not use the phrase "radical Islamic terrorism" - a favorite of President Donald Trump.
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The U.S. intelligence community has confirmed that Iran is developing "a range of new military capabilities to monitor and target U.S. and allied military assets in the region, including armed UAVs [drones], ballistic missiles, advanced naval mines, unmanned explosive boats, submarines and advanced torpedoes, and anti-ship and land-attack cruise missiles", according to Coats.
"We have dedicated a very significant amount of our intelligence resources to the issue of North Korea". "The Taliban are likely to continue to make gains, especially in rural areas", said the USA spy chief, adding that efforts to bolster local military have been less fruitful than hoped.
The report also notes that Iran's progress in its space program could expedite its path to an ICBM since space launch vehicles use similar technologies.
North Korea's missile tests in 2016, including a space launch that put a satellite into orbit, have shortened its pathway toward a reliable intercontinental missile that could strike the US, he said, and the North has expanded the size and sophistication of its ballistic missile forces.
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Coats, however, described the threat as potentially "existential". He recommended that US forces train with Afghan forces down the chain of command to the corps level, and that the Afghan security forces learn to make better use of intelligence, reconnaissance and surveillance (ISR) and air support.
Coats told the committee that he seems Iran holding to the nuclear deal agreed to last year, and that the deal, which extended Iran's breakout time for a nuclear weapon from a few months to a year, has enhanced transparency of Iran's nuclear activities. "We do not know whether Iran will eventually decide to build nuclear weapons". Coats said Afghan troops suffer from "combat casualties, desertions, poor logistical support and weak leadership". But much of the attention turned to acting FBI Director Andrew McCabe, making his first public appearance in that role since Trump fired James Comey on Tuesday.
US National Intelligence Director Dan Coats said on Thursday that even if the US and its allies increase their military aid to the war-torn country, the security situation there is still likely to deteriorate.
Sunni extremists remain the primary terrorist threat to the USA, with home-grown actors posing the biggest concern.
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Police credited the public with helping to solve the case, adding that 3,300 tips were made to a special crime hot line. Two men were also arrested in 2006 for killing eight people and shooting at dozens of others over the course of a year.