The US sees a mixed picture on world religious freedom, with progress in interfaith dialogue weighed against government repression and sectarian strife in many countries.

Secretary of State Hillary Clinton unveiled the latest State Department report on global religious freedom, which particularly criticised Iran and North Korea among other countries for harsh limits on religious expression.

"It is our hope that the ... report will encourage existing religious freedom movements around the world," Mrs Clinton said, adding that all people should have the right to believe or not as they see fit.

The report tagged North Korea, Iran, Myanmar, China, Sudan, Eritrea, Saudi Arabia and Uzbekistan among the worst offenders, placing them on a watch list put out earlier this year.

Officials said the latest review would help determine whether they stay on the list, which could leave some open to additional US sanctions.

Michael Posner, the State Department's top official for democracy and human rights, said President Barack Obama's call this year for a new beginning between the US and Muslims did not mean sidelining religious liberty.

"Religious freedom is a fundamental right, a social good, a source of stability, and a key to international security," Mr Posner said in the introduction to the report.

He praised interfaith dialogue efforts promoted by Jordan, Spain and other countries. But religious repression and discrimination remained huge problems worldwide.

"We're fully aware that even in countries with robust legal safeguards, including the US, we're not immune from acts of intolerance," he said.