The U.S. State Department updated its country profiles on terrorism but didn't issue a report on Syria, which is involved in a multi-front civil war.
The fighting in Syria has threatened to spill into Lebanon as Hezbollah fighters battle for territory alongside pro-government forces in Syria.
Iraqi security has lapsed in the wake of April provincial elections. The State Department said al-Qaida in Iraq posing a threat to U.S interests.
"AQI also took advantage of a significantly depleted security situation in Syria," the report said. "Operating under its alias, al-Nusrah Front, the group sought to portray itself as part of the legitimate Syrian opposition and attempted to hijack Syria's struggle for democracy."
The report comes as international critics of Syrian President Bashar Assad weigh options in terms of arming Syrian rebel forces. Critics of the move say the weapons could end up in al-Qaida's hands.
The U.S. government designated al-Nasrah Front as an al-Qaida alias in December.
The State Department added that it shared Israeli concerns about the transfer of weapons from Syria to terrorist organizations.
Hezbollah is labeled as a terrorist organization by the U.S. government and many of its allies.
Notable deaths of 2014 [PHOTOS]