In remarks prepared for the first State of the Union address of his second term, Mr Bush said that US troops - currently numbering some 150,000 - would increasingly focus their efforts on training Iraqi security forces to keep the country safe.
The aim was to prepare "more capable Iraqi security forces - forces with skilled officers and an effective command structure." Once that is done, administration officials have repeatedly said that US units would be gradually brought home, though they refuse to give any firm timetable.
In his traditional annual speech to both chambers of Congress, the President developed the lofty themes of his second inaugural last month, vowing a renewed push for peace between Israel and the Palestinians and declaring that the only means of halting tyranny and terror "is the force of human freedom."
Clearly buoyed by what are generally seen as surprisingly successful Iraqi elections, following on the heels of similar exercises in the Palestinian territories and Afghanistan, Mr Bush was expected to unveil a new aid package for the Palestinians worth up to $350m (pounds 185m), as a sign of his backing for the new leader Mahmoud Abbas.
But after a first term dominated by the "war on terror" and the invasion of Iraq, the emphasis last night was on his ambitious domestic agenda, topped by the boldest attempt to reform America's social security system in its 70-year history.
In his speech, aides said, Mr Bush would give a more detailed picture of his plan to part-privatise the federal pension and unemployment benefit programme. He is also urging Congress to move on several initiatives, including bills to reform tort law, simplify the tax code and modernise US immigration laws.
But despite the enlarged Republican majorities in both House and Senate that emerged from the November 2004 election, he faces an uphill path on all fronts, especially his contentious bid to overhaul social security.
Democrats are almost to a man against it, and Harry Reid, the party's leader in the Senate, warned the President this week to "face the fact" that social security reform in the shape Mr Bush envisaged did not have a hope of passage.
But many Republicans too have misgivings about the cost of the measure, which could add up to $2 trillion to future budget deficits. Other conservative Republicans strongly oppose the President's immigration plans, which they say amounts to an amnesty for millions of illegal immigrants. In effect, Mr Bush has the next two years to achieve his goals. After the 2006 mid-term elections, he will increasingly assume `lame duck' status, as minds focus on the 2008 Presidential race and the eventual successor.Reuse content