Declaring his confidence that "this young century will be liberty's century", Mr Bush told the UN general assembly in New York that Iraq and Afghanistan were poised to become examples for the rest of the Middle East of peaceful, democratic societies.

Coming six weeks before the US elections, the speech appeared essentially tailored for a domestic audience rather than foreign consumption.

In response to Mr Bush's speech, Democratic presidential challenger John Kerry said last night: "Iraq is in crisis and the president needs to live in the world of reality, not in a world of fantasy spin.

"The president really has no credibility at this point. He has no credibility with foreign leaders who hear him come before them and talk as if everything is going well ..."

By conflating the wars in Afghanistan and Iraq he also sought to tie the Iraq war, which remains unpopular with American voters, more closely to his "war on terror", where polls show he is stronger.

In the 24-minute address to the 191-country gathering, Mr Bush was unapologetic about his decision to invade Iraq, arguing that he had "helped deliver the Iraqi people from a brutal dictator" while enforcing international will.

"The security council promised serious consequences for [Saddam Hussein's] defiance," said Mr Bush, spelling out his justification for going to war without that council's approval. And the commitments we make must have meaning. When we say serious consequences, for the sake of peace there must be serious consequences. And so a coalition of nations enforced the just demands of the world."

Minutes earlier, the UN secretary general, Kofi Annan, delivered a scarcely veiled criticism of US foreign policy as he chided those countries which "shamelessly disregarded" international law.

"Those who seek to bestow legitimacy must themselves embody it, and those who invoke international law must themselves submit to it," said Mr Annan, who last week branded the US-led invasion of Iraq illegal under international law. "We must start from the principle that no one is above the law, and no one should be denied its protection."

The criticism of the US was not addressed by the president, who went on to call on world leaders to assist the US in rebuilding Iraq, a request that has gone unheeded several times before.

"The government of prime minister Allawi has earned the support of every nation that believes in self-determination and desires peace," he said. "The UN and its member nations must ... do more to help build an Iraq that is secure, democratic, federal and free."

Playing down the instability and huge loss of life of Iraqi civilians and US soldiers, Mr Bush said: "Not long ago, outlaw regimes in Baghdad and Kabul threatened the peace and sponsored terrorists ... Today the Iraqi and Afghan people are on the path to democracy and freedom. These two nations will be a model for the broader Middle East."

Warning that there would be worse days ahead, Mr Bush conceded that "we can expect terror attacks to escalate" as elections approach in Afghanistan and Iraq. But he vowed that his mission was "not to retreat, it is to prevail ... We will be standing with the people of Afghanistan and Iraq until their hopes for freedom and liberty are fulfilled."

Coming the day after Mr Kerry, accused him of "stubborn incompetence" and "colossal failures in judgment" on the war in Iraq, Mr Bush will have been acutely aware of his domestic audience.

Polls show a contradictory view among Americans with regards to Mr Bush's foreign policy. He is well-regarded in his prosecution of his war on terror, much less so on his handling of Iraq.

His speech attempted to balance these factors by broadening it to the fight against Aids, relieving developing countries' debt and promoting "hope and progress as the alternatives to hatred and violence".

He lambasted the Palestin ian leadership but also delivered rare, if gentle, criticism of Israel, calling on the Israeli prime minister, Ariel Sharon, to impose a freeze on settlements in the West Bank and Gaza and to dismantle "unauthorised outposts".

He also called for an international ban on human cloning and proposed establishing a new "democracy fund" within the UN to help countries institute the rule of law and hold free elections.

Reaction to Mr Bush's speech, which received only moderate applause, was initially sparse. The Swiss president, Joseph Deiss, said: "In hindsight, experience shows that actions taken without a mandate which has been clearly defined in a security council resolution are doomed to failure."