President Bush discussed the war in Iraq and the strength of the economy in a news conference in Washington.
Mr. Bush says while there is ongoing violence in Iraq, there are also signs of progress that give him confidence in the future of the country.
The president says he disagrees with former Iraqi Prime Minister Iyad Allawi, and does not believe Iraq has fallen into civil war.
Mr. Bush said he believed Iraqis had faced a choice and decided not to plunge their country into civil war.
President Bush says there are three goals for the U.S.-led mission in Iraq that are a vital part of achieving victory.
Mr. Bush says that first, Iraq must not be a safe haven for terrorists. He said terrorists have made gaining power in Iraq a central goal, and that must be prevented.
Mr. Bush also says that Iraqi security forces must be strengthened so they can provide security and defend Iraq.
Finally, Mr. Bush says democracy must take hold in Iraq, and become strong enough to resist those who oppose it.
Mr. Bush says establishing a unity government is an essential part of achieving those goals. He said it will also give hope to Iraqis and Americans.
President Bush added that Iran must understand that the international community cannot allow Iran to have the capacity or knowledge to make nuclear weapons, for the security of the world.
Mr. Bush said if Iran had such capabilities, it could blackmail the world and contribute to the spread of nuclear weapons.
Mr. Bush said Iran is walking away from international accords and safeguard measures.
He said U.S. policy toward Iran will be to continue to work with European countries known as the EU-3 (Britain, Germany and France), Russia and China in negotiations with Iran on its nuclear program.
Mr. Bush said Iran has a negotiating advantage in those talks because it is a non-transparent society.
On a key domestic issue, Mr. Bush said the U.S. economy is strong, with household net worth at an all-time high and unemployment at 4.8 percent.
Mr. Bush also recalled his speech Monday in Ohio, where he said he understood that Americans are "disheartened," but asked them to look beyond the bloodshed in Iraq to see the progress.
President Bush rejected suggestions that he might benefit from some changes to his staff, saying he is satisfied with the people he has surrounded himself with.
Mr. Bush said his staff has dealt with the war in Iraq, Scandals and many other issues, and they had placed their country above their own self-interest.
Recent opinion polls show Mr. Bush's approval ratings at the lowest level of his presidency.
When asked about opinion polls showing fewer Americans approve of his performance, Mr. Bush said he understands that Americans are worried about whether or not the United States can win the war in Iraq. But he said he also understands the consequences of leaving Iraq too early.