Stepping up his attack on his Republican rival, the Democratic presidential candidate criticised Bush for shifting rationale for the war in Iraq and warned of more "reckless mistakes" if he was re-elected.
"The president's policy in Iraq precipitated the very problem he said he was trying to prevent," Kerry said. "Iraq is becoming a sanctuary for a new generation of terrorists who someday could hit the United States."
With rising casualties, fears of civil war and questions about whether elections can be held in Iraq in January as scheduled, the Massachusetts senator is trying to make the conflict a key barometer of Bush's record in office.
"The president misled, miscalculated, and mismanaged every aspect of this undertaking," Kerry said, accusing Bush of making "catastrophic decisions" and surrounding himself with ideologues who provide "stubborn incompetence".
Kerry says Bush misled the nation
in the rush to invade Iraq
"The president now admits to miscalculations in Iraq," Kerry said. "His were not the equivalent of accounting errors.
"They were colossal failures of judgment - and judgment is what we look for in a president."
Kerry said Bush had offered 23 reasons for going to war - a comeback to Republicans who count how many times they say Kerry has flip-flopped on Iraq - and "if his purpose was to confuse and mislead the American people, he succeeded".
Bush listed Iraq's weapons of mass destruction and its purported ties with terrorist groups as reasons for going to war, but when these were consistently shown to be false, the president changed tack and said simply removing Saddam Hussein from power was reason enough.
"Saddam Hussein was a brutal dictator who deserves his own special place in hell. But that was not, in itself, a reason to go to war," Kerry said. He said satisfaction that Hussein was gone did not hide the fact "we have traded a dictator for a chaos that has left America less secure".
Bush told supporters at a rally in New Hampshire that his rival was siding with Saddam Hussein over democracy.
"Forty-three days before the election, my opponent has now suddenly settled on a proposal for what to do next - and it's exactly what we're currently doing," Bush told supporters at a rally in advance of the 2 November contest.
Bush says January elections in
Iraq are going ahead as planned
"We're working with the international partners, we're training Iraqi troops, we're reconstructing the country, we're preparing for elections. We're going to have elections in January," the president said.
Bush's comments came after the Democrat launched his most blistering attack yet on the March 2003 invasion to oust Saddam Hussein, calling it "a profound diversion" from the war on terrorism.