"A by-product of these activities has been the bolstering of Sunni extremist groups that espouse a militant vision of Islam and are hostile to America and sympathetic to Al-Qaeda," Hersh concludes.
"The 'redirection,' as some inside the White House have called the new strategy, has brought the United States closer to an open confrontation with Iran and, in parts of the region, propelled it into a widening sectarian conflict between Shiite and Sunni Muslims."
Some US aid distributed to Sunni groups in Lebanon falls into the hands of radical groups, US, European and Arab officials told the weekly magazine.
"We're spreading the money around as much as we can," a former senior intelligence official said, and that has "serious potential unintended consequences."
Such money "always gets in more pockets than you think it will," the source said. "It's a very high-risk venture."
A member of Prime Minister Fouad Siniora's government in Lebanon said: "We have a liberal attitude that allows Al-Qaeda types to have a presence here."
In some cases, the clandestine operations rely on Saudi Arabia and its national security advisor, Prince Bandar, to provide the funding, so that operations remain secret, according to portions of the article, which The New Yorker distributed to news organizations on Sunday.
There is an apparent debate between some in the US government over which is more dangerous to US interests: Iran or Sunni radicals. Some in the Administration have argued that Iran is the bigger threat, which is a victory for the Saudi line, writes Hersh.
In the Saudi view, Saudi Arabia is "taking a political risk by joining the U.S. in challenging Iran: Bandar is already seen in the Arab world as being too close to the Bush Administration. 'We have two nightmares,' [a] former diplomat told [Hersh]. 'For Iran to acquire the bomb and for the United States to attack Iran. I’d rather the Israelis bomb the Iranians, so we can blame them. If America does it, we will be blamed.'"
Although US Secretary of State Condoleezza Rice has defined a new Iran policy in broad terms, much of the change is secret.
The secrecy does not please Democrats who have recently taken the reins of power in Congress from the Republicans.
Senator Ron Wyden, a member of the Intelligence Committee, said, "The Bush administration has frequently failed to meet its legal obligation to keep the intelligence committee fully and currently informed. Time and again, the answer has been 'Trust us.' ... It is hard for me to trust the administration," he told the weekly magazine.
Hersh also said the pace of US covert operations inside Iran has increased.
"That's been happening for months," Hersh told CNN television Sunday.
"There's been a lot of very aggressive cross-border activity," he said. "It's more than just casual," he said. "That's been going on quite a bit."
"We have been pumping money, a great deal of money, without congressional authority, without any congressional oversight ... for covert operations in many areas of the Middle East where we ... want to stop the Shiite spread or the Shiite influence," he told CNN.
"These are people connected to Al-Qaeda who want to take on Hezbollah," he said.
"We may not directly be funneling money to them, but we certainly know that these groups exist," Hersh told CNN.