An annual study ranking nations in terms of how peaceful they are has given poor marks to the US and Russia, placing them firmly in the bottom half of a list of 140 states, according to the Financial Times.

Iceland tops the survey, which analyses how peaceful countries are both in terms of international policy and domestic conditions. For the second year running, Iraq is in last place due to the continuing violence since the 2003 US-led invasion.

However, the different results scored by the world`s leading powers remain the most striking feature of the Global Peace Index, the brainchild of Steve Killelea, an Australian entrepreneur and philanthropist. The survey, published today, finds that 16 of the 20 most peaceful states are European democracies - most of them members of the European Union. If the EU is judged as a bloc, it would come in fourth place.

However, China is put in 67th place, the US is 97th and Russia is at 131.

The Global Peace Index is drawn up by the Institute for Economics and Peace, an independent think-tank, together with the UK-based Economist Intelligence Unit. It tests each nation against 24 "peacefulness" criteria, including a nation`s relations with its neighbours, arms sales and foreign troop deployments.

It also takes into account data on a nation`s crime rate, its prison population and the potential for terrorism within its borders.

The low ranking of the US, which comes below Syria, Rwanda and Mongolia, reflects its high level of -military expenditure and engagement. It also has proportionally more citizens in jail than any other state.

Russia remains in the bottom 10 despite a lower score in the measure of domestic conflict, which partly reflects increased stability in Chechnya. Relations with neighbouring countries are moderately tense and Russians have low levels of trust in other citizens, probably a reflection of the country`s high rates of violent crime.

In Europe, France, Britain, Cyprus and Greece fall out of the top 20. Relatively high levels of militarisation in the UK and France are one of the main reasons the states receive a lower ranking.

Iceland`s position reflects its internal political stability and its good relations with its neighbours. But internal factors also count, Iceland has no standing army and among the lowest proportion of its citizens in jail.

Iraq`s position at the bottom of the table is no surprise, given that 4m Iraqis are now said to be in exile. Among the least peaceful states clustered at the bottom of the list are Somalia, Sudan and Afghanistan.

The 2008 list also reveals the biggest risers and fallers since the first survey was conducted last year. The nations making the biggest jump up the table are Angola, Indonesia, India and Uzbekistan.

Angola has risen 13 points because, five years after the end of the civil war, it has an increasingly stable political scene and is set to hold elections this year for the first time in 15 years.

Kenya, which witnessed serious internal violence after December`s presidential elections, has been the biggest faller.

By James Blitz in London, Financial Times