At a press conference on Wednesday, the US president said that the US was taking heavy casualties - more than 90 American soldiers have been killed so far in October in the worst monthly toll for a year.
Speaking in the East Room of the White House he also said that victory in Iraq was vital to future generations of Americans and intimated that pressure was being put on Iraqi leaders to improve the situation.
"The events of the past month have been a serious concern to me," he said. "I know many Americans are not satisfied with the situation in Iraq. I am not satisfied either."
Bush, conscious of the looming mid-term elections, said victory was essential in Iraq as part of his "war on terror".
Bush said that as those fighting US and Iraqi forces change their strategies, the United States is also adjusting its military tactics.
More than 90 US soldiers have
died in Iraq in October
"Americans have no intention of taking sides in a sectarian struggle or standing in the crossfire between rival factions," he said.
Bush rejected calls to increase pressure on the Iraqi government of Nuri al-Maliki to assume more responsibility for security.
"We're pressing Iraq's leaders to take bold measures to save their country. We're making it clear that America's patience is not unlimited," Bush said at the news conference.
"We will not put more pressure on the Iraqi government than it can bear."
Support for Iraqi leader
Bush also offered support for the Iraqi prime minister, saying he thought al-Maliki was the right man to achieve the goal in Iraq, adding that the US would stand by him.
Some politicians have been calling on the Bush administration to increase pressure on the Iraqi government through the threat of withdrawal of troops or other measures, if the security situation in Iraq does not improve.
"We cannot allow our dissatisfaction to turn into disillusionment about our purpose in this war"
George Bush, US president
Bush reiterated that the US would stay the course in Iraq.
"We cannot allow our dissatisfaction to turn into disillusionment about our purpose in this war," Bush said, stressing that the war was a calling of the current generation.
"The consequences in Iraq will have a decisive impact on the security of our country," he said.
"The outcome will determine the destiny of millions across the world," Bush said, warning that turning Iraq over to America's enemies would destabilise the Middle East, provide a "safe-haven" for terrorism and hijack world oil production.
"They will launch new attacks on America from this new safe haven. They will pursue their goal of a radical Islamic empire that stretches from Spain to Indonesia."