"Each of us has pledged before the world: We will never bow to the violence of a few," the president said to an audience of ambassadors.
The speech comes as the coalition that has helped the United States keep order in Iraq shows signs of strain, as doubts about the case for war persist, and as Americans and Iraqis continue to die in violence.
, bringing the U.S. death toll in Iraq to 569. Civilian casualties included two journalists who may have been shot by U.S. troops, although the military had no information on the incident.
Spain has said it plans to pull troops out by June if the United Nations does not take over the Iraq mission. South Korea has cancelled plans to send troops to a tense region of Iraq, saying it will instead deploy personnel at another, safer location.
Mr. Bush addressed Spain's recent losses in the. After the bombings there last week, Mr. Bush's ally, Prime Minister Jose Maria Aznar, was defeated in an upset. His replacement had long promised to withdraw Spanish troops unless the U.N. took over.
"We have shared in the sorrow of the Spanish people," Mr. Bush continued. "The murders in Madrid are a reminder that the civilized world is at war and in this new kind of war civilians find themselves suddenly on the front lines."
Then, as Mr. Bush often does, he named some of the places hit by terrorists in recent years: Israel, Jordan, Turkey, Pakistan and Iraq.
"Each attack is designed to demoralize our people and divide us from one another. And each attack must be answered not only with sorrow, but with greater determination, deeper resolve and bolder action against the killers," the president said. "It is the interest of every county and the duty of every government to fight and destroy this threat to our people."
"There is no neutral ground in the fight between civilization and terror," he added. Any retreat, he said, "only validates terrorist violence."
Much of the president's speech touched on broader efforts to prevent nuclear proliferation, as well as the war that ousted the Taliban from Afghanistan, and the work to rebuild that country.
Justifying the war as part of the fight against terrorism, Mr. Bush told his White House audience of diplomats from 83 nations that there can be no neutral ground between good and evil, and with Spain threatening to withdraw its troops from iraq, the president warned against allied divisions, reports CBS News Correspondent Bill Plante.
"There can be no separate peace with the terrorist enemy. Any sign of weakness or retreat simply validates terrorist violence and invites more violence," Bush said.
But there was almost no mention of weapons of mass destruction – the urgent argument for war which the Colin Powell made to the United Nations and the president made to the world one year ago, reports
In his remarks on the Iraq war, Mr. Bush said the conflict was waged "to enforce United Nations demands, to defend our security and to liberate that country from the rule of a tyrant."
"For Iraq it was a day of deliverance," he said, calling the fall of Saddam "a turning point for the Middle East and a crucial advance for human liberty."
The president addressed the large portion of world opinion that opposed the war.
"There've been disagreements in this matter among old and valued friends. Those differences belong to the past," he said.
Despite the failure to find any, the president said, "it is a good thing that years of weapons development … have come to an end."
"Who would prefer that Saddam's torture chambers still be open? Who would wish that mass graves were still being filled? Who would begrudge the Iraqi people their liberation?" the president asked.
In articles and talk show appearances, Bush administration officials on Friday were claiming success a year after bombs fell on Baghdad, marking the start of the second U.S.-led war against Iraq.
But despite the passage of time, officials were still pressed to justify the war.
"I think we've made great progress in one year," said national security adviser Condoleezza Rice, telling the CBS News Early Show "a brutal dictatorship is gone and the Middle East will be a safer place."
"This man was a threat to peace and security and the world is far better off without him," Rice said.
Many Iraqis do feel their lot has improved, reports CBS News Correspondent Kimberly Dozier.
Iraq's shops are full of imported goods and Iraqis are at last free to reach the outside world by telephone and satellite. They've embraced freedom of speech with170 new newspapers. After months of rolling blackouts, power is back online. And despite repeated sabotage of oil pipeline, Iraq is pumping out more oil than before the war.
The U.S. coalition has reopened schools and hospitals, and launched a new currency and a new security force.
But thousands of people in Iraq have suffered from suicide bombings — a phenomenon unknown here until after the U.S.-led war toppled Saddam's regime nearly a year ago.
And American military officials say they cannot train and equip Iraqi security forces fast enough to stop the mounting toll of civilian deaths from terrorist attacks. Nor is there any intent to expand the American troop presence to counter the violence.
"The dedicated terrorist will be able to attack regardless of the number of security personnel," Gen. Peter Pace, vice chairman of the Joint Chiefs of Staff, said in an Associated Press interview Thursday.
Visiting Baghdad, Secretary of State Colin Powell said Friday that the threat of terrorism persists and said it's no time for civilized nations to "run and hide."
"Terrorism existed in many parts of the world before this war," Powell said at a news conference after meeting with Iraqis, coalition leaders and U.S. troops here.
Other coalition partners have shown no signs of wavering. Australia, the Philippines and Japan said they would not cancel their participation. And Polish national security adviser said Friday that President Aleksander Kwasniewski told Mr. Bush that Polish troops would stay in Iraq "as long as needed, plus one day longer."
But in his first criticism of the case for war, Kwasnieswki said Thursday he was "mislead" about Iraq's alleged weapons of mass destruction.
Powell said Washington provided "full, candid and open information" on Iraq.