In a State of the Union address that also served as an election year appeal, President Bush said America is "a nation called to great responsibilities. And we are rising to meet them."
Mr. Bush defended the war in Iraq and said his tax cuts had strengthened the economy as he laid out the themes of his re-election campaign in Tuesday night's speech to a joint session of Congress.
But, he said, the nation still faced important challenges and choices.
"We have not come all this way – through tragedy and trial and war – only to falter and leave our work unfinished," Mr. Bush said.
"Twenty-eight months have passed since Sept. 11, 2001 – over two years without an attack on American soil – and it is tempting to believe that the danger is behind us. That hope is understandable, comforting and false," he said.
The president defended his decisions to go to war in Afghanistan and Iraq and said his administration is confronting nations that harbor and support terrorists and can supply them with nuclear, chemical or biological weapons.
"Because of American leadership and resolve, the world is changing for the better," he said, pointing out that the United States had captured or killed two-thirds of the leadership of the al Qaeda network — although Osama bin Laden remains at large.
He also said that 45 of the top 55 officials in Saddam Hussein's government have been captured or killed.
"For all who love freedom and peace, the world without Saddam Hussein's regime is a better and safer place," the president said.
With more than 500 American troops killed in Iraq, Mr. Bush said, "The work of building a new Iraq is hard, and it is right. And America has always been willing to do what it takes for what is right."
The president acknowledged that some Americans opposed his decision to go to war in Iraq. But he said, "Had we failed to act, the dictator's weapons of mass destruction programs would continue to this day."
He steered clear of new predictions that American inspectors will find weapons of mass destruction in Iraq. In last year's State of the Union, Mr. Bush denounced Saddam Hussein as a "dictator who is assembling the world's most dangerous weapons," and devoted a large section in his speech to cataloguing them.
In nearly 10 months, not a single item has been found in Iraq from a long and classified intelligence list of weapons of mass destruction.
The president also differed with critics who assert that Western-style democracy is not a realistic goal in the Middle East.
"I believe that God has planted in every heart the desire to live in freedom. And even when that desire is crushed by tyranny for decades, it will rise again," he said.
On the domestic front, Mr. Bush said he was optimistic about the reviving economy and urged Congress to take steps to make sure the recovery lasts.
"We have come through recession and terrorist attack and corporate scandals and the uncertainties of war," he told the assembled lawmakers. "And because you acted to stimulate our economy with tax relief, this economy is strong and growing stronger."
Democrats were quick to take issue with the president's rosy view, noting that 2.3 million jobs have been lost under Mr. Bush, that deficits are soaring and casualties are climbing in Iraq. Democrats sat silently through most of the 54-minute speech while Republicans applauded repeatedly.
Mr. Bush said America's economy was being transformed by technology that makes workers more productive but requires new skills. He called for new job-training grants channeled through community colleges.
He also urged Congress to address the rising costs of health care with tax-free savings accounts for medical expenses, tax credits to pay for insurance and ceilings on medical malpractice damage awards.
Touching on a politically sensitive issue, he said he would support a constitutional amendment banning same-sex marriages if the courts struck down a law saying marriage should be between a man and woman.
"All of us – parents, schools, government – must work together to counter the negative influence of the culture and to send the right messages to our children," he said.
The State of the Union is an annual political ritual, putting the president at center stage to report on the nation's health. This year it falls one year to the day before Inauguration Day, underscoring the high stakes for Mr. Bush in an address seen by tens of millions on television.
The speech came as Mr. Bush's approval rating – which rose following the capture of Saddam Hussein – had slipped to 50 percent, matching his lowest ratings ever, according to the latest CBS News/New York Times poll. Mr. Bush's disapproval rating, in the poll conducted Jan. 12-15, was the lowest of his presidency – 45 percent.
Even before Mr. Bush's speech, his Democratic rivals in the presidential race were voicing their critiques.
"What will be most striking tonight is what this president won't discuss," said former Vermont Gov. Howard Dean in a campaign press release. "The three million jobs lost under his watch, the 43 million Americans without health insurance, the record level of bankruptcies, the $8 trillion increase in our nation's debt."
Massachusetts Sen. John Kerry, fresh from his surprise victory Monday in Iowa, criticized Mr. Bush's "arrogant" foreign policy. "He's not making America safer in the process," he said.
In the official Democratic response, the top two Democrats in Congress, Senate Minority Leader Tom Daschle and House Minority Leader Nancy Pelosi, said Mr. Bush wasn't doing enough to protect the country from terrorists or to improve the economy.
Pelosi criticized Mr. Bush's "go-it-alone foreign policy that leaves us isolated abroad and that steals the resources we need for education and health care here at home."
Daschle said, "Instead of borrowing even more money to give more tax breaks to companies so that they can export even more jobs, we propose tax cuts and policies that will strengthen our manufacturing sector and create good jobs at good wages here at home."