Defending his Iraq policy before the American Legion's national convention in St. Louis, Mr. Bush said Iraq has become a "point of testing" in the war on terror, and vowed, "There will be no retreat."
"We are on the offensive against terror and we will stay on the offensive against terror," Mr. Bush said.
The president's appearance before the veterans came as the number of troops who have died in postwar Iraq reached 140 — surpassing the number killed during major combat.
A total of 278 soldiers have died since the war began March 20. Mr. Bush declared an end to major combat May 1.
Mr. Bush told the American Legion that foreign terrorists were joining Saddam Hussein's loyalists in targeting not just U.S. forces, but U.N. workers. By doing so, he said they were attacking the civilized world.
"No nation can be neutral in the struggle between civilization and chaos," Mr. Bush said. "Every nation that stands on the side of freedom and the value of human life must condemn terror and act against the few who destroy the hopes of the many."
Though he said U.S. forces were making progress in Iraq, he cautioned that pacifying the country was a "massive undertaking," and he reminded legionnaires who fought in World War II that rebuilding Europe took years, not months.
And he declared that yielding in Iraq would only "invite further and bolder attacks."
Mr. Bush, on a daylong outing from his ranch in Texas, sandwiched his remarks to the veterans between two political fund-raisers.
At an earlier luncheon in St. Paul, Minn., Mr. Bush said "terrorists declared war on the United States of America and war is what they got."
"The enemies of freedom are not idle and neither are we," he told about 600 people at the $2,000-per-ticket event at the St. Paul RiverCentre.
The event put another $1.2 million in the bank for Mr. Bush's re-election effort next year, a campaign spokesman said.
Mr. Bush has raised at least $56 million for his re-election.
About 75 people protested outside as Mr. Bush's motorcade arrived at the speech site in St. Paul. One sign said, "Admit failure. Beg the U.N. for help." Another said: "Search for economic recovery," a reference to the unsuccessful hunt for weapons of mass destruction in Iraq.
After visiting the American Legion, Mr. Bush was headed to a hotel fund-raiser on behalf of Sen. Kit Bond, R-Mo., who is up for re-election to a fourth term next year. He was due back at his Texas ranch Tuesday night.
On Monday, two of his top advisers previewed his remarks in their own speeches to separate groups of active and retired military members.
Defense Secretary Donald H. Rumsfeld, addressing several hundred members of all the military services at Lackland Air Force Base in San Antonio, defended the U.S.-led war against terrorism.
America did not ask for this war, he said, "but it is a war we have to fight and we have to win, because there is no safe, easy middle ground. Either we take the war to the terrorists and fight them where they are — at this moment, to be sure, in Iraq and Afghanistan and elsewhere — or at some point we will have to fight them here at home."
Condoleezza Rice, Mr. Bush's national security adviser, noted the president's promise last week to prevail against terrorism after more than three dozen people were killed on one day in bombings at the U.N. headquarters in Baghdad and on a crowded bus in Jerusalem.
"The president has backed up these words with action," Rice told several thousand delegates at the annual Veterans of Foreign Wars convention, also meeting in San Antonio.
Earlier at the same podium, Sen. John Kerry, D-Mass., one of Mr. Bush's rivals for the White House, said the administration's policies had failed U.S. troops in Iraq and had neglected the servants of past wars.
"I believe a lack of planning and the lack of candor with the American people have placed our men and women in uniform in increased harm's way," said Kerry, himself a decorated Vietnam War veteran.
On Tuesday, Missouri Rep. Dick Gephardt, another Democratic candidate for president, called on Mr. Bush to seek help from the United Nations and NATO to bring peace to Iraq.
"If we're going to succeed in winning the peace in Iraq, we're going to have to have help," Gephardt said in a telephone conference call with reporters. "We need people."