The Saudi government has stepped up efforts to cut off financing for terrorists since al Qaeda started targeting it in a bombing campaign a year ago, but it still must improve in some areas to demonstrate its seriousness about the task, said a new report by an influential foreign policy group.

"Saudi Arabi has made significant improvements to its anti-money laundering and counter-terrorist financing regime," said the report by a panel convened by the Council on Foreign Relations. But the kingdom also "has yet to demand personal accountability" by prominent Saudis who help fund terrorists, the report added.

The Saudi Embassy disputed the suggestion in the 54-page report -- to be released today at a hearing of the Senate Governmental Affairs Committee -- that Saudi officials are dragging their feet in any way in confronting terrorist funding. "We've done a lot on this front, and we're planning to do more," said Adel Jubeir, foreign policy adviser to Crown Prince Abdullah, Saudi Arabia's de facto leader.

U.S. officials complained after the Sept. 11, 2001, attacks that the Saudis were not adequately monitoring Muslim charities that finance terrorists, but Washington started withdrawing those complaints after May 2003, when terrorists staged the first in a string of suicide attacks in Riyadh. Since then, the Saudi government has cracked down on money pipelines to terrorist groups, U.S. officials say.

But the council report said it is still not clear that Riyadh will act on all the initiatives it has begun. The council also pointed out that top Saudi officials have continued to spread bizarre conspiracy theories about the source of some terrorist activity, such as earlier this year, when top Saudi leaders alleged that "Zionist elements" were the hidden hand behind some al Qaeda attacks in the kingdom.

But the council's main criticism was that the Saudi government has not taken steps against some well-connected Saudi business figures despite U.S. assertions that they fund terrorism.

The council's report pointed out that two wealthy Saudi philanthropists who have been declared terrorism financiers by the U.S. government, Yasin Qadi and Wa'el Hamza Jalaidan, have not been punished by Riyadh and "appear to live freely in Saudi Arabia."

In response, a Saudi official said the pair are strongly contesting the accusations against them. "You can't condemn people on the basis of suspicion," said the official, who spoke on the condition of anonymity because of the sensitivity of the accusations. "If there's evidence of wrongdoing, they'll be prosecuted."

In a report to be released within weeks, the Financial Action Task Force, an international auditing group, praised new Saudi restrictions designed to stop charities from funding terrorism as being "unprecedented."