Contact: White House, Office of the Press Secretary, 202-456-2580

DAYTON, Ohio, March 27 /Standard Newswire/ -- The following text is of remarks by President Bush on the global war on terror:

National Museum of the United States Air Force
Wright-Patterson Air Force Base
10:21 A.M. EDT

THE PRESIDENT: Thank you all very much. (Applause.) General Metcalf, thanks, thanks for welcoming me back here. I am really pleased to be back to Wright-Patt, and it's great to be on the inside of the National Museum of the United States Air Force, which is a fabulous place. I hope our fellow citizens come and see it. It is a great tribute to the airmen who've flown the missions and secured the skies, and defended America's freedom.

I want to thank the folks who maintain this shrine. I thank you for giving me a place to park Air Force One. (Laughter.) And I appreciate the hospitality of the people who serve our country here at Wright-Patt. And I want to thank you for coming to give me a chance to share with you an update on the historic work our nation is undertaking in Iraq.

Over the past year, we have seen significant security gains result from the surge. Less visible are the political and economic changes taking place -- from major pieces of legislation being passed to simple signs of normalcy. This progress isn't glamorous, but it is important. And that's what I'm here to talk about today.

But before I do so, I want to thank not only General Metcalf, but I want to thank Congressman Jim Jordan for serving our country. (Applause.) I appreciate the State Auditor, Mary Taylor, for joining us today. Thank you for coming. (Applause.) I am grateful that the Mayor, Mayor McLin, took time to come by and say hello. Madam Mayor, thank you very much for your -- (applause.) Appreciate the other state and local officials.

I do want to thank General Bruce Carlson, Commander of the Air Force Materiel Command; Colonel Colleen Ryan; and all those wear the uniform. I'm proud to be with you, and I'm proud to be your Commander-in-Chief. (Applause.)

I thank very much the fact that Susan Kettering came, Vice President of the Kettering Family Foundation. And the reason why she's important, and the foundation is important, is they've been strong supporters of this museum.

And finally, I want to recognize Amanda Wright-Lane, great grand-niece of Orville and Wilbur Wright. (Applause.) Thanks for coming. Nothing wrong with having famous relatives. (Laughter.)

This museum pays tribute to a -- to great aircraft and great airmen and women -- from the first fliers of The Great War, to the aces of World War II, to the daring pilots of Korea and Vietnam. And over the past six years, a new generation of American airmen and women have joined that storied history. After all, the Air Force was critical in liberating the people of Afghanistan, and the people of Iraq, and taking the fight to the enemy overseas so we do not have to face them here at home. On a fateful day in this war, airmen delivered justice to the al Qaeda terrorist Zarqawi, in the form of two precision-guided, 500-pound bombs. (Applause.)

The military achievements in Iraq have been accompanied by a political transformation. It can feel like distant history, but it was only five years ago that Iraq was one of the most brutal dictatorships on Earth -- a totalitarian nightmare where any election was a sham, and dissenters often found themselves buried in mass graves. In a matter of 15 months, the Iraqi people reclaimed their sovereignty. They went on to choose an interim government, and to ratify the most democratic constitution in the Arab world. And in December 2005, 12 million Iraqis elected a government under that constitution -- a display of courage that defied the terrorists, disproved the critics, and should always inspire the world.

Tragically, the progress threatened to unravel in 2006. The new government Iraqis elected took months to form. In the meantime, a terrorist attack on a Shia shrine in Samarra drove sectarian tensions past the breaking point. Sunni extremists, including al Qaeda terrorists, and Shia extremists, some backed by Iran, slaughtered innocent Iraqis in brutal attacks and reprisal killings. And across the country, political and economic activity was set back.

We took a hard look at the situation, and responded with the surge. This dramatic shift in policy had two primary goals. The first was to improve security conditions. So I ordered 30,000 additional soldiers and Marines into Iraq, and gave them a new mission, to focus on protecting the Iraqi people, and to hold the gains that had been made.

The other goal of the surge was to open up space for political and economic progress after security returned. So we deployed additional civilian experts and more than doubled the number of Provincial Reconstruction Teams, with a mission to ensure that security gains were followed up by improvements in daily life.

General Petraeus and Ambassador Crocker will provide more details about the progress of the surge when they testify before Congress early next month. But this much is clear: The surge is doing what it was designed to do. It's helping Iraqis reclaim security and restart political and economic life. It is bringing America closer to a key strategic victory in the war against these extremists and radicals.

On the security side, the surge has brought important gains, which I discussed in detail last week in a speech at the Pentagon. In Baghdad, we've worked with Iraqi security forces to greatly diminish the sectarian violence and civilian deaths. We've broken the grip of al Qaida on the capital. We've weakened the influence of Iranian-backed militias. We've dramatically improved security conditions in many devastated neighborhoods in what some have deemed a "re-liberation."

In Anbar Province -- which 18 months ago was declared "lost" to al Qaeda -- we joined with the brave local sheiks who launched the first large-scale Arab uprising against al Qaeda. Together, we've systematically dismantled al Qaeda in that province. In just over a year, Ramadi, the capital of Anbar, has seen its average number of attacks plummet from more than 18 per day to less than one per week. It's becoming clear that Anbar has not been lost to al Qaeda -- that al Qaeda has been -- has lost Anbar. And that's important, because this is the place where al Qaeda leadership has said they will find safe haven from which to launch further attacks against the United States of America.

In other parts of Iraq -- from Baghdad belts to Diyala province to parts of the south -- we've worked with coalition and Iraqi forces to drive terrorists out of strongholds and put them on the run. Now al Qaeda has concentrated its efforts in the area of Mosul, which is in northern Iraq. And there's going to be tough fighting in Mosul, and in areas around Mosul, in the weeks and months. But we are determined, along with the Iraqis, to make sure al Qaeda meets the same fate there that it has met elsewhere in Iraq. (Applause.)

A key factor in these security gains has been new cooperation from the Iraqi people. Ordinary Iraqis have come forward with intelligence tips. Citizens who were once hostile to the coalition have switched sides and are now joining with us. Over the past year, more than 100,000 Iraqis have joined their nation's security forces. In other words, there was an Iraqi surge to match our own. These Iraqis are fighting and sacrificing for their country. They want to live in a free society. Iraqi mothers want their children to grow up in peace, just like American mothers do. (Applause.)

The Iraqi forces are growing in capability. Recently, they planned and executed a highly effective operation to secure nearly nine million pilgrims celebrating the religious holiday of Arbaeen. And as we speak, Iraqi security forces are waging a tough battle against militia fighters and criminals in Basra -- many of whom have received arms and training and funding from Iran.

Prime Minister Maliki's bold decision -- and it was a bold decision -- to go after the illegal groups in Basra shows his leadership, and his commitment to enforce the law in an even-handed manner. It also shows the progress the Iraqi security forces have made during the surge. Iraqi forces planned this operation and they deployed substantial extra forces for it. They're leading the operation. Prime Minister Maliki has traveled to Basra to oversee it firsthand.

This offensive builds on the security gains of the surge, and demonstrates to the Iraqi people that their government is committed to protecting them. There's a strong commitment by the central government of Iraq to say that no one is above the law. This operation is going to take some time to complete, and the enemy will try to fill the TV screens with violence. But the ultimate result will be this: Terrorists and extremists in Iraq will know they have no place in a free and democratic society. (Applause.)

The surge is yielding major changes in Iraqi political life. And that is important. Before the surge, politics at every level was shutting down. And for leaders, security crises prevented the routine conduct of government. And for ordinary citizens, politics were a distant concern. I mean, after all, they were simply trying to keep their families alive. And for all Iraqis, the violence hardened sectarian attitudes and made tough political compromises impossible.

A year later, one year later, after we sent additional troops into Iraq, the situation has changed markedly. With security improving, local citizens have restarted the political process in their neighborhoods and cities and provinces. Let me give you an example. In Ramadi, tribal sheiks who led the uprising against al Qaeda are now leading a revival of politics. With the support of our PRTs, Ramadi now has a fully-staffed mayor's office, and neighborhood councils have formed. Judges are presiding over courts and restoring the rule of law.

As the news of the success in Anbar has spread, similar grassroots movements have sprung up all around the country. Today, some 90,000 Iraqis belong to local citizens group bearing the proud name "Sons of Iraq." Many of these groups are Sunnis; some are Shia; some are mixed. But whatever their makeup, these groups of citizens are determined to protect their communities, they are determined to fight extremism, and they increasingly participate in civic life. In other words, people have stepped up and said, we're sick and tired of our families having to live in violence. We can't stand the thought of people who murder the innocent to achieve political objectives, and we intend to do something about it. And they have. (Applause.)

And the central government is beginning to respond to these Sons of Iraq. And it's not easy. I mean, after all, some of them were former regime members or former insurgents. Yet the Iraqi government has pledged to incorporate about 20 to 30 percent of the Sons of Iraq into the Iraqi army and police forces. For the rest, the national government has now committed $196 million to fund jobs programs -- so that brave Iraqis who stand up to the extremists and the murders and the criminals can learn the skills they need to help build a free and prosperous nation.

The Sons of Iraq movement is only one element of the bottom-up political process. You know, sometimes it requires grassroots politics to get the folks in central government to respond. (Applause.) Sometimes that happens in our own country. (Laughter.) But it's happening in Iraq.

You know, another sign of bottom-up political progress is the rebirth of Iraqi civil society. We take civil society for granted in America. But civil society was destroyed during the time of the brutal dictator, Saddam Hussein. And yet, it's now coming back to life. Civic organizations are springing up. Institutions that sustain a free nation are strengthening. Our PRT in Karbala, for example, helped local residents establish a women's center that will provide education and promote equality. In Anbar, they just ran a 5-K race on what used to be the most dangerous streets in Iraq.

I talked to General Odierno -- he's the number two man in Iraq. He just came back after courageously serving our country, and he came to the Oval Office, and here's what he told me. He said, he flew over Baghdad 15 months ago and he couldn't see a single soccer game. On his final flight last month, he counted more than 180. Now, that may sound normal to us and we take it for granted, but it is a sign that the surge is working and civil society is beginning to grow. It is a sign normalcy is returning back to Iraq.

And over time, these developments at the local level have increased pressure for action at the national level. Leaders in Baghdad are responding. By any reasonable measure, the legislative achievements in Baghdad over the past four months have been remarkable.

In December, the government enacted a pension law that will allow tens of thousands of Sunnis to collect the retirement benefits they were promised. Part of reconciliation is to reach out to groups who may not have trust in central government. You build trust by honoring commitments.

In January, leaders enacted a de-Baathification law that allows mid-level Baath Party members to re-enter political and civic life. There was a period of time that if you were associated with the Baath Party you couldn't teach in a school. And yet there was a need for teachers. And this law will make it easier for civil society to grow, and helps reconcile the past.

In February, leaders enacted a budget that increases spending on security capital reconstruction projects and provincial governments. And on the same day, leaders enacted an amnesty law to resolve the status of many Iraqis held in Iraqi custody. Last week, leaders reached agreement on a provincial powers law that helps define Iraqi federalism, and sets the stage for provincial elections later this year. And that's an important piece of legislation because it will give Iraqis who boycotted the last provincial election -- such as Sunnis in Anbar or Ninewa provinces -- a chance to go to the polls and have a voice in their future.

These pieces of legislation deal with complex issues that are vital for the reconciliation of the country, and fundamental for a democratic society. I mean, we've been arguing about the role of the federal government relative to the states for a long time here in America. We've been trying to get the balance right. There's a constant struggle between the proper role of state and local government versus the role of the federal government. Well, that's what the Iraqis are now struggling through.

You know, they got their budget passed, and sometimes it takes our Congress a while to get its budget passed. (Laughter.) Nevertheless, some members of Congress decided the best way to encourage progress in Baghdad was to criticize and threaten Iraq's leaders while they're trying to work out their differences. But hectoring was not what the Iraqi leaders needed. What they needed was security. And that is what the surge has provided. When the security situation improved and Iraqi the leaders were reassured that America wouldn't leave them, that America would support them, they then made tough compromises necessary to get key pieces of legislation passed.

And it is a lesson worth remembering as Iraq's national government goes about the substantial work that remains -- including implementing the laws it's passed, reviewing its constitution, drafting a electoral law, and passing laws to reform its oil sector and codify revenue sharing. It's also worth remembering the enormity of what the Iraqis are trying to do. They're striving to build a modern democracy on the rubble of three decades of tyranny, in a region of the world that has been hostile to freedom. And they're doing it while under assault from one of history's most brutal terrorist networks.

When it takes time for Iraqis to reach agreement, it is not "foot dragging," as one senator described it during Congress's two-week Easter recess. It is a revolutionary undertaking that requires great courage. You know, one Iraqi leader recently acknowledged that he's faced four assassination attempts a year since liberation. Yet he proudly serves his nation, with strong determination, because he wants to live in a free society, and he understands what I understand -- free societies yield the peace we want. And it's in our interests to stand strongly with the leaders like that in Iraq and give them all the support necessary to succeed. (Applause.)

The improvements in security resulting from the surge are also enabling Iraqis to make progress on their economy. Iraq has great economic potential -- they've got a young, energetic population, it's got a lot of natural resources. Yet in many ways, the legacy of the tyrant continues to haunt the Iraqi economy. The government is forced to rely on the centralized food and fuel rationing system that Saddam used to control his population and to punish his enemies. The infrastructure for Iraq's oil sector is still owned and managed by the central government, and suffers from decades of under-investment. Iraq's economic problems grew worse during the sectarian violence that preceded the surge -- oil revenues declined, businesses closed their doors, and infrastructure was destroyed.

A year later, almost every key economic indicator has turned around. Since the surge began, business registrations have increased by more than 9 percent. Total inflation has fallen by more than 60 percentage points. Investment in the energy and telecom industries has increased. The agriculture sector is improving. Oil production is up, particularly north of Baghdad. The oil fields there have more than doubled production, and exports through Turkey have expanded significantly.

The national government has announced a plan to reform the food rationing system. Economic growth is projected to be a robust 7 percent this year. And the confidence of Iraqis is rising; they're beginning to see a more hopeful future. More than 75 percent of Iraqi businesses, according to a recent survey, expect the economy continue growing over the next two years.

As the economic situation stabilizes, Iraq's government has stepped forward to meet more of its own expenses. This is a mark of pride for Iraqis, and it is a point of insistence for us. Early in the war, America funded most of the large-scale reconstruction projects in Iraq, and we changed our focus. Now we're focused on encouraging entrepreneurship. The Iraqi government is stepping up on reconstruction projects. They have outspent us in the recent budget 11 to 1, and soon we expect the Iraqis will cover 100 percent of those expenses. (Applause.)

The same is true when it comes to security spending. Initially, the United States paid for most of the costs of training and equipping the Iraqi security forces. Now Iraq's budget covers three-quarters of the cost of its security forces, which is a total of more than $9 billion in 2008. And soon, Iraq should, and we expect them, to shoulder the full burden of their security forces.

They have other work to do in their economy. The reforms needed to transition from a command-and-control economy to a modern market-based system are complex, and it's going to take some time. Centralized electricity generation is now above pre-war levels, but it is not sufficient to meet the needs of Iraq because demand is growing. Other key infrastructure needs to be upgraded, especially energy pipelines and storage facilities. Unemployment is still too high; corruption remains a challenge. But the good news is the Iraqis recognize these shortcomings. They understand what they have to do. And we're going to help them succeed. We're sending experts to help them succeed in their goals.

Listen to the words of Iraq's Deputy Prime Minister: "Last year was the year of security," he said. "This year is the year of reconstruction, it is the year of services, and it's the year of combating corruption." We're going to help them meet those goals.

The surge is also helping give Iraq's leaders the confidence to expand their international engagement. Iraqi leaders are working hard to meet the criterion required to join the WTO, which would help its entrepreneurs benefit from the opportunities of a global economy. Iraq has taken steps to attract foreign investment, including holding its first "Business to Business" expo since the Gulf War. The government is meeting its pledge to reform its economy in exchange for development assistance and debt relief through the International Compact for Iraq.

Much of the world is increasing its commitment to Iraq. The United Kingdom, Italy, and South Korea are leading PRTs. The United Nations is playing an expanded role in Iraq, and will help prepare for this year's provincial elections. And next month, the third Expanded Neighbors Conference will meet in Kuwait City to discuss ways the region and the world can further support Iraq's political, economic, and security progress. This is a key diplomatic initiative. It will include all of Iraq's neighbors, as well as the permanent members of the U.N. Security Council, the G8, the Arab League, and the Organization of Islamic Conference.

Iraq's neighbors can do much more. And we're constantly sending out diplomatic missions to encourage them to do more. Earlier this week, the King of Bahrain came to visit me in the Oval Office, and his government announced that he will send an ambassador to Iraq. And I appreciate that, and urge other nations in the region to follow his lead. It's in their interest that a peaceful Iraq evolve. At the same time, the regimes in Iran and Syria must stop supporting violence and terror in Iraq. (Applause.)

Iraq also wants to solidify its relationship with the United States. Last year, Iraqi leaders came to us with a request to form a long-term strategic partnership. This partnership would help assure Iraqis that political and economic and security cooperation between our nations will endure. This partnership would also ensure protections for American troops when the U.N. mandate for Multi-National Forces in Iraq expires this December. Now, this partnership would not bind future Presidents to specific troop levels. This partnership would not establish permanent bases in Iraq. It would be similar to partnerships that we have with Afghanistan and other free nations around the world. My administration will work to complete this strategic partnership in the coming months. The Iraqi people have chosen to stand with America against our common enemies. And it's in our interest that we stand with them.

Having witnessed all this progress from the surge, the natural question is: What are the next steps? Well, this week I've been discussing that question with my national security team in Washington, as well as with General Petraeus and Ambassador Crocker in Baghdad. They will discuss that question with members of Congress when they come and testify in April. They'll outline the achievements of the surge, as well as the challenges that remain -- including the continued presence of al Qaeda, the violence caused by Shia extremists, the destructive influence of Iran, the flow of suicide bombers through Syria, the activities of PKK terrorists.

I'm going to carefully consider the recommendations of Secretary Gates, the Joint Chiefs of Staff, and those on the ground, General Petraeus and Ambassador Crocker. And I'll announce my decisions soon after I have fully met with them and heard their recommendations. And as I consider the way forward, I will always remember that the progress in Iraq is real, it's substantive, but it is reversible. And so the principle behind my decision on our troop levels will be ensuring that we succeed in Iraq. (Applause.)

As this debate unfolds, I ask people on both sides to keep an open mind, and to take a close look at the situation on the ground. Here is what one scholar and critic of the war recently wrote: "No one can spend some 10 days visiting the battlefields in Iraq without seeing major progress in every area. If the United States provides sustained support to the Iraqi government -- in security, governance, and development -- there is now a very real chance that Iraq will emerge as a secure and stable state."

Some, however, seem unwilling to acknowledge that progress is taking place. Early in the war, they said the political situation wasn't good enough. Then, after Iraq held three historic elections, they said the security situation wasn't good enough. Then, after the security situation began to improve, they said politics, again, wasn't good enough. And now that political progress is picking up, they're looking for a new reason.

But there's one thing that is consistent. No matter what shortcomings these critics diagnose, their prescription is always the same -- retreat. They claim that our strategic interest is elsewhere, and that if we would just get out of Iraq, we could focus on the battles that really matter. This argument makes no sense. (Applause.) If America's strategic interests are not in Iraq -- the convergence point for the twin threats of al Qaeda and Iran, the nation Osama bin Laden's deputy has called "the place for the greatest battle," the country at the heart of the most volatile region on Earth -- then where are they?

The reality is that retreating from Iraq would carry enormous strategic costs for the United States. It would incite chaos and killing, destroy the political gains the Iraqis have made, and abandon our friends to terrorists and death squads. It would endanger Iraq's oil resources and could serve as a severe disruption to the world's economy. It would increase the likelihood that al Qaeda would gain safe havens that they could use to attack us here at home. It would be a propaganda victory of colossal proportions for the global terrorist movement, which would gain new funds, and find new recruits, and conclude that the way to defeat America is to bleed us into submission. It would signal to Iran that we were not serious about confronting its efforts to impose its will on the region. It would signal to people across the Middle East that the United States cannot be trusted to keep its word. A defeat in Iraq would have consequences far beyond that country -- and they would be felt by Americans here at home.

For the same reason, helping the Iraqis defeat their enemies and build a free society would be a strategic victory that would resound far beyond Iraq's borders. If al Qaeda is defeated in Iraq after all the resources it has poured into the battle there, it will be a powerful blow against the global terrorist movement. If Iran is turned back in its attempt to gain undue influence over Iraq, it will be a setback to its ambitions to dominate the region. If people across the Middle East see freedom prevail in multi-ethnic, multi-sectarian Iraq, it will mark a decisive break from the long reign of tyranny in that region. And if the Middle East grows in freedom and prosperity, the appeal of extremism will decline, the prospects of peace will advance, and the American people will be safer here at home. The surge has opened the door to this strategic victory. Now we must seize the opportunity, and sustain the initiative, and do what it takes to prevail. (Applause.)

Realizing this vision is not going to be easy. Yet we should never let the difficulty of the fight obscure the justice of the cause. We should never let the difficulty of the moment cause us to shirk our duty to lay the foundation of peace for generations of Americans to come.

You know, when I mentioned justice of the cause, you see that when Americans in full battle gear hand out books to children, hand out books to total strangers. You see it when they defuse bombs to protect the innocent, or help organize a town council meeting. And you see that, there could be no doubt that America is a force for good and decency. (Applause.)

Four thousand of our finest citizens have sacrificed their lives in this mission. Every one of them was loved. Every one is missed. And we thank God for the gift of these brave Americans

-- and we ask Him to comfort their families. Every one of them will be honored throughout our history. But the best way to honor the fallen is to complete the mission, and lay the foundation of peace. (Applause.)

All those who serve on the front lines of this struggle, this ideological struggle, this confrontation against those who murder innocent men, women and children to achieve their political objectives, are patriots who are upholding the highest ideals of our country. Many of them are airmen -- and women. They're adding to the tradition of the great aviators honored by this museum, and of others known to us as family, friends, neighbors -- or in my case, Dad. The work that today's generation is doing is every bit as challenging, every bit as noble, and every bit as vital to our security as any that came before. When the history of this era is written, it will show that the Air Force -- and all of Americans' Armed Forces -- performed with unfailing skill and courage. It will show that the United States of America prevailed, and freedom advanced, and so did peace.

May God bless you. May God bless our country. (Applause.)

END 11:03 A.M. EDT