With anti-war protesters camped outside his Texas ranch, President Bush says U.S. troops will stay in Iraq until the country is stable. Mr. Bush says Iraqis are making progress toward Monday's deadline for drafting a new constitution.

Despite continuing violence in Iraq, President Bush says elected officials there are finishing work on a democratic constitution, a constitution that he says is a critical step on Iraq's path to self-reliance.

"Iraqis are taking control of their country, building a free nation that can govern itself, sustain itself and defend itself," said George W. Bush. "And we're helping Iraqis succeed. We're hunting down the terrorists, and training the security forces of a free Iraq so Iraqis can defend their own country."

Iraqi President Jalal Talabani says officials have resolved many of the outstanding issues, and are now focusing on demands by Shi'ites for their own federal region in southern Iraq.

In his weekly radio address, President Bush again linked the war in Iraq with the broader fight against terrorism and the attacks of September 11, 2001. He is rejecting calls for reducing U.S. troop levels in Iraq, saying those soldiers are fighting abroad, so Americans do not have to face terrorism at home.

"The terrorists cannot defeat us on the battlefield," the president said. "The only way they can win is if we lose our nerve. That will not happen on my watch. Withdrawing our troops from Iraq prematurely would betray the Iraqi people, and would cause others to question America's commitment to spreading freedom and winning the war on terror."

Public opinion polls show the president losing support on Iraq, with an Associated Press poll showing approval for his handling of the war at just 38 percent.

The president's five-week Texas holiday has also been overshadowed by anti-war protesters, led by the mother of a 24-year-old serviceman killed in Iraq.

Cindy Sheehan has been camping out near the president's Prairie Chapel ranch, asking for a meeting with Mr. Bush to explain her opposition to the war. The president drove by the protest Friday on his way to a Republican Party fundraiser, but did not stop.

Mr. Bush says he sympathizes with Mrs. Sheehan and understands how strongly she feels about the war. He told reporters this past week that he has thought long and hard about getting troops out of Iraq, but believes that would say that the United States is weak.