By John Whitesides, Political Correspondent

DES MOINES, Iowa, Dec 4 (Reuters) - The Democratic presidential contenders on Tuesday condemned President George W. Bush's contention that Iran remains dangerous despite an intelligence report saying it has stopped its nuclear arms program.

In a debate in Iowa, the candidates said Bush's hard-line policy on Tehran was another example of a foreign policy that has damaged the reputation of the United States and increased security risks around the globe.

"It is absolutely clear that this administration and President Bush continue to not let facts get in the way of his ideology," said Illinois Sen. Barack Obama. "And that's been the problem with their foreign policy generally."

Sen. Hillary Clinton of New York, who leads national polls in the Democratic White House race and is locked in a tight three-way struggle in Iowa with Obama and former North Carolina Sen. John Edwards, said Bush was wrong.

"I vehemently disagree with the president that nothing's changed and therefore nothing in American policy has to change," Clinton said.

"I have for two years advocated diplomatic engagement with Iran, and I think that's what the president should do. He should seize this opportunity and engage in serious diplomacy."

Bush insisted earlier on Tuesday that Iran remains dangerous and urged continued international pressure despite a new National Intelligence Estimate (NIE) that said Tehran halted its nuclear arms program in 2003.

The debate, the second in four days in Iowa, was broadcast exclusively on public radio and came as the race intensified ahead of the Jan. 3 contest that opens the state-by-state battle to choose candidates for the November 2008 general election.

The Democratic presidential contenders in 2004 also had a radio-only debate, the first since Republican primary candidates Harold Stassen and Thomas Dewey met in 1948.

Sponsors said the idea of the radio debate was to remove television cameras and allow candidates and voters to concentrate on substance. The debate covered just three topics -- Iran, China and immigration -- and candidates did not have time limits on their answers. (To read more about the U.S. political campaign, visit Reuters "Tales from the Trail: 2008" online at http://blogs.reuters.com/trail08/)

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