Warning that Iraq has become "the central front" in the global war on terrorism, Bush appealed for wider international help in rebuilding Iraq, offering the United Nations an expanded role there.
"Members of the United Nations now have an opportunity, and the responsibility, to assume a broader role in assuring that Iraq becomes a free and democratic nation," Bush said during the address, which began at 00:30 GMT on Monday.
"Iraq is now the central front in a battle against global terrorism," said Bush.
"We will do whatever is necessary, we will spend what is necessary, to achieve this essential victory."
Increasingly under fire at home for his Iraq adventure, Bush has presented a fresh spending request of $87 billion to pay for Iraq's reconstruction, which he had promised would be paid for by lucrative Iraqi oil sales.
"Members of the United Nations now have an opportunity, and the responsibility, to assume a broader role in assuring that Iraq becomes a free and democratic nation"
George Bush, US President
"Enemies of freedom are making a desperate stand there, and there they must be defeated. This will take time, and require sacrifice," Bush said, aiming to soothe increasing US domestic worries over the Iraqi occupation.
"Our strategy in Iraq has three objectives: destroying the terrorists … enlisting the support of other nations for a free Iraq … and helping Iraqis assume responsibility for their own defence and their own future," Bush stressed.
The much-awaited speech was Bush's first White House address to the nation on Iraq since he announced the start of hostilities on 19 March. Speaking from an aircraft carrier on 1 May, he had declared major combat over in Iraq.
The address has assumed special significance since it comes amid a transatlantic divide over US policy on Iraq.
Many of Bush's domestic critics have been urging the president to seek a greater role for the UN in Iraq in order to ease the burden from US shoulders.
But major European powers including France, Germany and Russia, who opposed the attack on Iraq, have been cool towards US calls for a greater UN presence in Iraq.
A US-sponsored draft resolution has been criticised by France, Germany and Russia, who say it does not give the UN or the Iraqi people enough power.