In the first of a series of speeches defending his handling of the war on terrorism and the unpopular conflict in Iraq, said Bush said that Tehran must face "consequences" for snubbing a UN-imposed deadline to halt uranium enrichment.

"The Iranian regime is pursuing nuclear weapons in open defiance of its international obligation," the president told the American Legion veterans group. "It is time for Iran to make a choice."

"We've made our choice. We will continue to work closely with our allies to find a diplomatic solution, but there must be consequences for Iran's defiance, and we must not allow Iran to develop a nuclear weapon," he said.

With many of Bush's Republicans worried that the unpopular war in Iraq may cost them control of the US Congress in November elections, the president rejected calls for a US withdrawal as an "absolutely disastrous" betrayal of the Iraqi people that would also endanger the US public.

He said Iraq would turn into a "new sanctuary" for terrorists eager to exploit its oil riches and warned: "If we give up the fight in the streets of Baghdad, we will face the terrorists in the streets of our own cities."

Bush also mocked opposition Democrats who have called the March 2003 invasion of Iraq a "diversion" from the war on al-Qaeda and flatly rejected their calls for setting a timetable for a phased pull-out of US troops.

"The security of the civilised world depends on victory in the war on terror, and that depends on victory in Iraq. So the United States of America will not leave until victory is achieved," he said.