In their first substantive meeting held on the sidelines of the UN General Assembly after 16 months of intense feuding, the two leaders announced on Wednesday their rift was finally over.
With the German Chancellor sitting by his side, Bush told reporters he had told Schroeder "look, we have had differences, and they are over, and we are going to work together."
Schroeder agreed, saying: " indeed we very much feel that the differences…have been left behind."
Their ''reconciliation'' ends months of strained ties between the US and Germany over the war on Iraq.
Though not repentant for the war that Germany bitterly opposed, Bush is now seeking German support for creating a multinational force in Iraq.
Schroeder said he had offered some assistance.
"Look, we have had differences, and they are over, and we are going to work together"
"I have told the president how very much we would like to come in and help with the resources that we do have. We very much envisage that we will assist and supply training for the security forces and police functions or be it some form of military function," he said.
Facing growing criticism over the mess in Iraq, Bush sounded buoyant after his meeting with Schroeder.
"I believe when Germany and America work together we can accomplish a lot of positive things. We are both committed to freedom. We are both committed to peace and I reaffirmed to Gerhard that America and German relations are very important to this administration," Bush said.