"Time is running out," Mr. Bush said during a Rose Garden news conference. "Congress needs to act wisely and promptly."
Responding to criticism from former Secretary of State Colin Powell and others, Mr. Bush said it's "flawed logic" and "unacceptable to think" there's any way to compare the actions of the U.S. and the actions of terrorists.
Mr. Bush denied that the United States might lose the high ground in the eyes of world opinion, as Powell suggested on Thursday.
The news conference took place a day after on terrorism legislation in the Senate Armed Services Committee, CBS News White House correspondent Mark Knoller reports.
Rebellious Republicans, led by Sen. John McCain of Arizona, rejected Mr. Bush's proposal for interrogating and prosecuting terrorism suspects, saying it would jeopardize the safety of U.S. troops.
Mr. Bush is urging the Senate to pass a bill more like a House-passed one that would allow his administration to continue holding and trying terror suspects before military tribunals.
Mr. Bush said he would work with Congress to resolve the disputed language, but stood firm on his demands.
"If not for this program, our intelligence community believes al Qaeda and its allies would have succeeded in launching another attack against the American homeland," he said.
"Unfortunately the recent Supreme Court decision put the future of this program in question. ... We need this legislation to save it."
The high court earlier this year struck down Mr. Bush's current arrangement for trying detainees held at the U.S. Naval Base Guantanamo Bay, Cuba.
Mr. Bush said that it was vital to change the law to protect intelligence professionals who are called on to question detainees to obtain vital information.
"They don't want to be tried as war criminals. ... They expect our government to give them clarity about what is right and what is wrong."
He called it an important debate that "defines whether or not we can protect ourselves. Congress has got a decision to make."
Democrats were quick to respond.
"When conservative military men like John McCain, John Warner, Lindsey Graham and Colin Powell stand up to the president, it shows how wrong and isolated the White House is," said Sen. Charles Schumer, D-N.Y.
McCain is a decorated Vietnam veteran and a former prisoner of war. Warner, R-Va., a former Navy secretary, is chairman of the Armed Services Committee. Graham, a committee member, is a former Air Force Reserve judge.
Republican leader Sen. McConnell, who supports the president's plan, said he hoped Congress could reach agreement "in a way where the interrogation of terrorist detainees can continue."
On Iraq, Mr. Bush said he regretted U.S. troop levels are rising instead of falling and denied anew that the surge in sectarian violence meant a civil war.
"We all want the troops to come home as quickly as possible,'' he said. But he said Gen. George Casey, the top U.S. commander in Iraq, needed reinforcements "to help the Iraqis achieve their objective."
"And that's the way I will continue to conduct the war. I'll listen to the generals," Mr. Bush said. "Maybe it's not the politically expedient thing to do. But you can't make decisions based on politics about how to win a war."
On other subjects, Mr. Bush:
Friday's news conference was Mr. Bush's first since Aug. 21, when he said the Iraq war was "straining the psyche of our country" but that leaving now would be a disaster.
Mr. Bush has made the struggle against terrorism and the war in Iraq the top issues in the November elections, hoping to persuade voters that Republicans are better than Democrats at protecting the country.