The United States on Thursday assailed the Islamic states of Iran and Saudi Arabia as the worst offenders of religious freedom rights in the Middle East.

The two countries - along with pre-war Iraq - were listed in the State Department's annual report on international religious freedom as nations in which there is "state hostility toward minority or non-approved religions."

Egypt was named a lesser offending nation where there is either state neglect religious persecution or discrimination toward certain groups.

Israel and Turkey, which had been in Egypt's class last year, graduated up a level to the group of nations in which there is "discriminatory legislation or policies disadvantaging certain religions, according to the report.

The designations do not carry sanctions, but Iran is already subject to myriad US restrictions and continues to be listed as "country of particular concern" in the area of religious freedom.

Despite calls from religious freedom and human rights watchdogs, Saudi Arabia, a key US ally in the Middle East, is not designated a "country of particular concern" although Thursday's report equates conditions there with those in Iran.

"These governments implement policies designed to intimidate certain groups, cause their adherents to convert to another faith or cause their members to flee," the report said.

In Iran, "members of the country's religious minorities ... suffered varying degrees of officially sanctioned discrimination, including intimidation, harassment and imprisonment," the report said, referring to Baha'is, Jews, Christians, Sunni and Sufi Muslims.

That discrimination - most pointedly directed at Baha'is and Jews - comes mainly in the areas of employment, education, and housing, it said.

As it has in its previous four editions, the 2003 report bluntly identifies Saudi Arabia as a country totally void of religious freedom.

"Freedom of religion does not exist in Saudi Arabia," it said, noting Riyadh's refusal to recognize any religion other than the Sunni branch of Islam and its bar on any public demonstration of a non-Muslim religion.

"Muslims not adhering to the officially sanctioned version faced harassment at the hands of the religious police," the report said, adding that Shi'as continued to be detained and face economic and political discrimination.

The report did note that Saudi Arabia had taken steps to rein in rising levels of intolerance toward other religions including the replacement of more than 2,000 government-paid imams accused of fomenting violence and terrorism.

"Senior (Saudi) officials have made some efforts to improve the climate of tolerance toward other religions and within Islam," it said, adding that there had been moves to delete disparaging references to non-Muslims in schoolbooks.

"However, there continued to be religious discrimination and sectarian tension in society ... including ongoing denunciations of non-Muslim religions from government sanctioned pulpits," it said.

Egypt was accused in the report of not acting consistently against religious freedom violations and, in some cases, being responsible for transgressions, particularly against of Baha'is and Christians.

"The government continued to prosecute persons, including Muslims, for unorthodox religious beliefs and practices under the charge of 'insulting heavenly religions'," it said.

The report was less severe on Israel and Turkey which were listed as countries in which laws or policies had put certain religions at a disadvantage.

In Israel and the occupied Palestinian territories, the report said some non-Jewish citizens "continued to experience discrimination in the areas of education, housing, employment, and social services," it said.

Government funding to the religious and education sectors tends to favor Jewish citizens and control of marriage, divorce and burial regulations lies only with Orthodox Jewish authorities, it noted.

In Turkey, the report said Ankara continued to restrict some faiths, Muslim and non-Muslim, amid ongoing debate of the country's secular status.

"Restrictions continued on non-Muslim religious groups and on Muslim religious expression in government offices and state-run institutions, including universities, usually for the stated reason of preserving the secular state," it said.