As part of a broad overhaul of his second-term cabinet, Bush also nominated former New York police commissioner Bernard Kerik to head the US homeland security department and accepted the resignation of Health and Human Services Secretary Tommy Thompson.
Rumsfeld, 72, faced calls for his resignation last summer over the prisoner abuse scandal at Iraq's Abu Ghraib prison, and some lawmakers have accused him of not sending enough troops to control Iraq after Saddam Hussein was ousted.
But the White House decided it was better to stick with Rumsfeld at a time when the United States is at war in Iraq, with more troops being sent to help the country get ready for 30 January elections.
Rumsfeld is also overseeing a major post-cold war transformation of the US military to make the force more mobile and responsive to new threats such as terrorism.
Rumsfeld is overseeing a
re-shaping of the US military
Rumsfeld had made clear his preference to stay on in the job at least for a while.
"Secretary Rumsfeld is a proven leader during challenging times. We're fighting a different kind of war and it's crucial that we win this war," the official said.
Kerik, 49, would replace Tom Ridge, the first secretary of homeland security. With his strong background in law enforcement, Kerik appeared to be heading towards easy Senate confirmation.
"I'm grateful he has agreed to bring his lifetime of security experience and skill to one of the most important positions in the federal government," Bush said.
Thompson, 63, told a news conference that after 40 years in
public service, including 14 as governor of Wisconsin, he was
ready to go into the private sector.
He said he almost resigned a year ago from the department that regulates health care but was persuaded to stay until the end of Bush's first term.