In a speech to U.S. war veterans in Reno, Nevada, Bush added that he has authorized the U.S. military in Iraq to confront alleged Iranian attempts to destabilize that country.
But he repeated charges that Iran -- which he called the world's biggest state backer of terrorism -- is behind much of the violence in Iraq.
An archive of RFE/RL's coverage of Iran's nuclear program.
"Shi'a extremists, backed by Iran, are training Iraqis to carry out attacks on our forces and the Iraqi people," Bush said. "Members of the Quds Force of Iran's Islamic Revolutionary Guard Corps are supplying extremist groups with funding and weapons, including sophisticated IEDs [improvised explosive devices]. And with the assistance of Hizballah, they've provided training for these violent forces inside of Iraq."
Bush warned that the United States has no intention of backing away from the turmoil in Iraq.
"America does not give in to thugs and assassins," Bush said. "And America will not abandon Iraq in its hour of need."
Iranians Detained In Baghdad
Shortly before Bush spoke, U.S. troops in Baghdad detained the seven members of an Iranian delegation at the Sheraton Hotel and took them away blindfolded and handcuffed to an undisclosed destination.
The incident is reminiscent of the U.S. seizure of five Iranians in January in the northern Iraq city of Irbil. Washington accuses those of being members of the Quds Force and has not released them.
Reports say the seven Iranians picked up on August 28 were released in the morning. Media reports describe them as officials from Iran's Energy Ministry in Baghdad to negotiate contracts on power stations.
President Bush speaking in Reno on August 28 (official photo)
Bush's criticism of Iran appeared to leave little room for compromise. But comments from the U.S. State Department, indicate that Washington has some flexibility.
"We very much hope to see that [the Iranian] government plays a positive role in Iraq," State Department deputy spokesman Tom Casey said. "And as you know, we have had conversations involving Iranian officials, not only between [U.S.] Ambassador [Ryan] Crocker and his counterpart in Iraq, but also through the broader group setting of the neighbors' conferences -- because we do believe it's important that all of Iraq's neighbors play a positive role in that country. But the way to do that isn't with this kind of rhetoric or with any kind of rhetoric, but through real concrete steps to help the Iraqi people and help the Iraqi government achieve stability and security and ultimately see that country move forward."
Iran Ready 'To Fill The Gap'
Bush and Casey's comments came the same day that Iranian President Mahmud Ahmadinejad played an unusually bold card, confirming that Iran wants major influence in a future Iraq.
He told journalists that U.S. political power in Iraq is "collapsing," and that there will soon be a power vacuum in that country. He said Iran is "prepared to fill the gap," along with its "friend" Saudi Arabia and other neighbors, and with the help of the Iraqi people.
Ahmadinejad likely singled out Saudi Arabia because it is a key Sunni Muslim state, whereas Iran is a Shi'ite power. The Iraqi population is largely divided between these two branches of Islam.