The CIA has for the first time publicly admitted using the controversial method of "waterboarding" on terror suspects.
The CIA says it used waterboarding on Khalid Sheikh Mohammed
CIA head Michael Hayden told Congress it had only been used on three people, and not for the past five years.
He said the technique had been used on high-profile al-Qaeda detainees including Khalid Sheikh Mohammed.
Waterboarding, condemned as torture by rights groups and many governments, is an interrogation method that puts the the detainee in fear of drowning.
Mr Hayden was speaking as National Intelligence Director Mike McConnell presented his annual threat assessment.
Congress has been debating banning the use of waterboarding by the CIA.
President Bush has threatened to veto such a bill.
Kuwaiti-born Khalid Sheikh Mohammed is accused of masterminding the 11 September attacks on the United States.
The two other men Mr Hayden said the CIA had also used waterboarding against are also top al-Qaeda suspects, Abu Zubaydah and Abd al-Rahim al-Nashiri, both from Saudi Arabia.
He told Congress: "We used it against these three detainees because of the circumstances at the time.
Michael Hayden (R) spoke as Mike McConnell reported to Congress
"There was the belief that additional catastrophic attacks against the homeland were inevitable. And we had limited knowledge about al-Qaeda and its workings.
"Those two realities have changed."
In his report, National Intelligence Director Mike McConnell focussed attention on al-Qaeda and its leadership based in the border area between Pakistan and Afghanistan.
"Al-Qaeda remains the pre-eminent threat against the United States, both here at home and abroad," he said.
His report said al-Qaeda enjoyed many of the same benefits from its bases in the border areas as it had when it was in Afghanistan proper, and was able to:
- use the region as a staging area for attacks outside
- maintain a group of skilled operators able to direct operations around the world
- pass on morale-boosting messages from Saudi-born al-Qaeda leader Osama bin Laden and his Egyptian deputy Ayman al-Zawahiri
- improve its ability to attack the US itself.
Despite this, Mr McConnell praised the Pakistani authorities, saying they had done more to "neutralise" terrorists than any of the US's other partners - despite more than 860 members of their security forces being killed by bombs in 2007.
And although al-Qaeda had suffered some reverses, he said, it remained active and dangerous in Iraq, in North Africa, in the Arabian peninsula, Lebanon, East Africa, Pakistan and South-East Asia.
Other worries outlined by Mr McConnell included:
- Russia, China and oil producers using their wealth to advance political goals
- nuclear proliferation, especially Iran and North Korea
- computer system vulnerabilities.
"The threats we face are global, complex and dangerous," he wrote.
"We must have the tools to enable the detection and disruption of terrorist plots and other threats."