The report said the NSA should halt the mass storage of domestic phone records and called for new scrutiny on snooping on world leaders plus privacy safeguards for foreigners and fresh transparency over US eavesdropping.
The 300-page report unveiled 46 recommendations to reshape US surveillance policy following explosive revelations by fugitive intelligence contractor Edward Snowden which outraged US allies and civil liberties advocates.
The report, by a five-man panel of legal and intelligence experts, was commissioned by President Barack Obama himself - yet puts him in a tricky political spot between those demanding change and the US intelligence community.
There is no guarantee the president will accept the non-binding recommendations: but he will consider his next steps over his end-of-year vacation in Hawaii and then address the American people in January.
The panel urged reforms of a secret national security court that oversees clandestine surveillance operations and an end to bulk retention of telephone "metadata" by the National Security Agency (NSA).
Mass collection of billions of telephone records could still go on -- but the "metadata" should not be kept by the NSA but in private hands, to permit specific queries by the agency or law enforcement, if national security is deemed at risk.
The NSA currently pours over telephone and Internet data to seek patterns of communications between extremists.
Twelve years after Al-Qaeda terror attacks unleashed a US war on terror and enshrined a massive new US intelligence and security infrastructure, the panel suggested things had perhaps gone too far.
"It is now time to step back and take stock," the report said.
"We conclude that some of the authorities that were expanded or created in the aftermath of September 11 unduly sacrifice fundamental interests in individual liberty, personal privacy, and democratic governance," it said.
Review board member Richard Clarke, a former White House counter-terrorism aide, warned: "We are not saying the struggle against terrorism is over."
But he called for mechanisms that were more transparent and have more independent oversight to give the public a new sense of trust.
Throughout, the report argued that a new equilibrium needed to be found between national security, and privacy and individual Constitutional rights.
It steered away from calling for outright curbs on gathering intelligence on foreign leaders, following embarrassing revelations that US spies had snooped on German Chancellor Angela Merkel's cellphone.
But it said US spy chiefs should be forced to justify surveillance on world leaders to the president and his aides.
The panel called for limits on national security letters issued by the Federal Bureau of Investigation without court approval to require telecommunications firms to hand over information.
The panel said a secret court handling foreign intelligence requests should have a public interest advocate so that it can hear more than only the government's arguments.
And it agreed with major technology companies which have been seeking to release more information on the numbers of national security requests they receive, and said the government should release numbers of its own.
The president has already signalled through senior aides that he will not agree with the board's suggestion that it should be possible for a civilian to head the NSA instead of a top general.
The release of the report comes amid deepening political pressure on the White House for significant reforms in the massive NSA telephone and Internet data mining operations in the United States and across the world.
Snowden's revelations, according to intelligence chiefs, inflicted significant damage on US clandestine operations against terror groups, while deeply embarrassing the Obama administration.
A federal judge in Washington this week ruled that NSA programs, which have scooped up millions of details on telephone calls and Internet traffic on Americans and foreigners, were probably unconstitutional.
Some civil liberties advocates welcomed the survey.
"This report is a clarion call for intelligence reform, powerfully boosting the credibility and momentum of sweeping, fundamental change," said Democratic Senator Richard Blumenthal.
But others said that it may not go far enough.
"It is less clear that private providers holding the same data would be anything more than bulk collection by proxy, a process that could expose massive amounts of private information to the prying eyes of government agencies beyond just the NSA," said the Constitution Project.
Soiurce: AFP via I-Net Bridge
