The Maoists also operate in parts of southern India, the State Department said in its latest annual report on terrorism.
It said hundreds of people were killed in conflicts between the government and various leftist extremist groups, such as Naxalites and the Communist Party of India (Maoists), and also in internecine war.
"The Government of India is very concerned over the threat from leftist extremist groups to internal stability and democratic culture," it said.
The report mentioned that there were at least 971 Naxalite attacks in the first seven months of 2007 which, it said, was approximately equal to that of the entire previous year.
"The Leftist extremists are highly active across a wide swath of India, including the states of Jharkhand, Chhattisgarh, Andhra Pradesh, Bihar, Uttarakhand and West Bengal. They were also active in some areas of Orissa, Maharashtra and Karnataka," the report said.
Referring to numerous attacks in the north eastern region, particularly in Assam, Nagaland, Manipur, Tripura and Meghalaya, the US State Department said ethnic and linguistic separatist groups were responsible for the incidents.
The report said several proscribed terrorist groups operated in the north east, including the United Liberation Front of Assam (ULFA) and the People's Liberation Army (PLA).
It said at least 850 people died in conflicts between dozens of insurgent groups and security forces and in bloody conflicts between themselves.
"Lack of security, remoteness and terrain combined to prevent the government from providing security and other basic services in many of the areas in which the Leftist extremist and northeastern separatist groups operated," it said.
The report said both types of groups increased the level of sophistication of attacks this year by using satellite phones and Improvised Explosive Devices (IEDs).
The State Department said in some districts these groups took control of a large proportion of the territory, making it impossible for government service providers to enter the area.
"Infighting, particularly among groups in the northeast may have slowed the increase in the attacks, but poverty and isolation combined to make the rural, mountainous and forested areas of India vulnerable to both the Maoists and those who claimed to be fighting for liberation in the northeast," it added.