Some security measures around the country will be relaxed, officials said. It was unclear whether the heightened alert had prevented any terrorism.
The yellow level signifies an elevated risk of terrorist attacks. It is the middle level on the five-tier danger scale. The old level, orange, marks a high risk, and is the second-highest level.
Still, a significant threat remains, officials said.
"We must be vigilant and alert to the possibility that al Qaeda and those sympathetic to their cause, as well as former Iraqi-regime state agents and affiliated organizations, may attempt to conduct attacks against the U.S. or our interests abroad," Homeland Security Secretary Tom Ridge said in a statement.
The threat level was raised on March 17, days before the war began. Officials said threats from al Qaeda, Iraqi operatives and freelance terrorists all played into the decision to raise the level. Many of the enhanced security measures in the parallel "Operation Liberty Shield" — the code name for an alert system keyed specifically to Iraq — also will be terminated, officials said.
Officials typically don't describe what security measures are dropped for fear of exposing potential vulnerabilities.
"We believe that during 'Operation Liberty Shield,' there were individuals in places, at times, where they should not have been," said Brian Roehrkasse, a spokesman for the Department of Homeland Security. "The investigations continue on those."
Roehrkasse declined to provide specifics.
The alert system is used to guide law enforcement agencies, businesses and the general public in their security decisions. It is driven by world events and information gathered by U.S. intelligence agencies.
It has bounced between yellow and orange since the system was put in place in March 2002. The highest alert level, red, and the two lowest, blue and green, have never been used.
This was the third time the alert level went to orange. No attacks took place in the previous heightened alerts.
For this alert, U.S. counterterrorism officials say the most specific information pointed to possible attacks on U.S. forces in the Middle East. A recent statement from Osama bin Laden, the Saudi-born leader of al Qaeda, declared some solidarity with Iraqis, although he referred to Saddam's government as infidels.
In addition, it was feared that operatives working for Iraq's Mukhabarat, Saddam's intelligence service, would attempt bombings or other terrorist-style attacks, officials said. Many are thought to work out of Iraqi embassies around the world under diplomatic cover, as intelligence agents often do.
Shortly before the war, the administration asked 60 countries to expel some 300 people it alleged were Iraqi intelligence operatives. Many countries, their governments opposed to the war, refused.
Alleged Iraqi operatives were arrested in Jordan and Yemen in connection with plots against American embassies there. And the Philippines expelled several Iraqis for alleged links to espionage and Islamic extremist groups.
The countermeasures taken under the raised alerts were most conspicuous in the two cities terrorists targeted on Sept. 11.
In Washington, the White House was closed to tourists as police used the city's network of 14 closed circuit cameras to monitor activity at landmarks, including the Washington Monument, the Capitol and Union Station.
In New York, police prowled city streets with bomb-sniffing dogs, submachine guns and radiation detectors. Officials worried about suicide bombers and armed takeovers of television stations.
Authorities at the North American Aerospace Defense Command and the new Northern Command in Colorado Springs said war could mean more jet fighters patrolling the skies around big cities and ground-based air defenses around population centers.
School officials in Washington's Maryland suburbs canceled field trips not only to the Nation's Capital, but also other East Coast cities.
Authorities in the U.S. fanned out to power plants, bridges, state capitols and other facilities to shield them against possible retaliatory strikes.
As the war began, the State Department issued an updated worldwide caution, reports CBS News Correspondent Charles Wolfson, warning U.S. citizens abroad of the potential for anti-American violence. The threats include the possibility of attacks by terrorist groups, and notes that terrorists do not distinguish between official and civilian targets.
A separate warning was issued to caution all Americans in the Middle East and North Africa. Both the blanket warning and the regional announcement remain in effect until July 20.