Iran is determined to develop nuclear weapons and could produce one by early to mid next decade, the head of US intelligence said Tuesday, calling it a "very dangerous situation."

But retired admiral Michael McConnell, the new director of national intelligence, said Iran was a concern to the United States beyond its nuclear aspirations.

Rising oil income and perceived successes of its surrogates Hamas and Hezbollah has extended Iran's influence in the Middle East, disturbing Arab states, and its military poses a challenge in the Gulf, he said.

"We assess that Iran seeks to develop nuclear weapons and has shown greater interest in drawing out the negotiations rather than reaching an acceptable diplomatic solution," he said.

"This is a very dangerous situation as a nuclear Iran could prompt destabilizing countermoves by other states in this volatile region," he said.

"While our information is incomplete, we estimate that Iran could produce a nuclear weapon by early to mid next decade," he said.