In a hastily arranged appearance in the White House press briefing room on Friday, Bush named Democratic senator Charles Robb and a pro-Republican appeals court judge Laurence Silberman as the chairmen.
The president announced the commission would "look at American intelligence capabilities, especially our intelligence about weapons of mass destruction."
The commission comes amid growing calls for Bush to explain the inability to find weapons of mass destruction in Iraq despite tall White House claims before the war.
Iraq's alleged possession of weapons of mass destruction had served as the US-justification for the war.
"We are determined to figure out why," Bush said. "We are also determined to make sure that American intelligence is as accurate as possible for every challenge in the future."
The commission has been given until 31 March 2005 to report back.
"We are determined to figure out why"
Opponents of the war insist the White House has manipulated and exaggerated intelligence to back Iraq's invasion.
Turning the heat further on Bush was David Kay, America's former head weapons hunter, who last week said intelligence services "had got it all wrong" in respect to Iraqi weapons.
Kay said he was more or less convinced Iraq possessed no weapons of mass destruction.
Bush also announced as members of the commission Arizona Republican senator John McCain, Lloyd Cutler, who was White House counsel for former Democratic presidents Bill Clinton and Jimmy Carter, Yale President Richard Levin, Admiral William Studeman, former deputy director of the CIA and former appeals court judge Pat Wald.
Two more members are expected to be named.
Democrats have questioned whether the commission can be independent if its nine members are hand-picked by the president.
The Democrats also want the commission to investigate whether the Bush administration exaggerated the CIA's intelligence to build a case against Iraq.
Bush had initially been reluctant to order a commission. But he finally succumbed under pressure from Republicans and Democrats on Capitol Hill.