Iraqi police said on Thursday that U.S. air strikes killed 10 people in Sadr City, a militia stronghold in eastern Baghdad where street fighting had eased after four days of clashes that killed close to 90 people.
Bush endorsed a recommendation by his commander in Iraq, Gen. David Petraeus, to complete a limited withdrawal of combat troops by July, but then impose a 45-day freeze of the total at about 140,000 troops before considering more possible cuts.
"I've told him he'll have all the time he needs," Bush said in Washington.
The Sadr City slum has since Sunday been the focal point of battles between security forces and black-masked Mehdi Army militiamen loyal to Shi'ite cleric Moqtada al-Sadr.
The violence is an extension of clashes that erupted in March when Prime Minister Nuri al-Maliki cracked down on the militia in the southern city of Basra. It has coloured a U.S. election-year debate over troop cuts by highlighting the fragility of recent security gains.
In his speech, Bush stepped up his criticism of Iran, accusing it of backing militants behind attacks in Iraq, and said failure in Iraq would embolden both Iran and al Qaeda.
"Iraq is the convergence point for two of the greatest threats to America in this new century: al Qaeda and Iran," Bush said, although he reassured a weary public that the war will end.
"While this war is difficult, it is not endless," he said of the conflict, now in its sixth year.
U.S. Defence Secretary Robert Gates held out the prospect of more troop withdrawals this autumn. "I would emphasize that the hope, depending on conditions on the ground, is to reduce our presence further this fall," he told the U.S. Senate Armed Services Committee.
