As a result several key Democrats in the US Congress have withdrawn their backing for Mukasey's confirmation.
On Thursday, Senator Edward Kennedy, a leading Democratic voice, became the fourth of 10 Democrats on the 19-member Senate judiciary committee to announce that he will vote against Mukasey.
The committee is due to vote on Mukasey's nomination next Tuesday.
Speaking in the Senate, Kennedy said Mukasey's unwillingness to give a definitive answer on the torture question increased the chances that waterboarding could be used against US troops.
An interrogation technique that simulates drowning by immobilising a prisoner with his head lower than his feet and pouring water over his face.
CIA interrogators are alleged to have used the technique on Khaled Sheikh Mohammed, the alleged mastermind of the 9/11 attacks.
"I therefore intend to oppose this nomination," he said.
"Judge Mukasey appears to be a careful, conscientious and intelligent lawyer, and he has served our country honourably for many years. But those qualities are not enough for this critical position at this critical time."
US interrogators are alleged to have used waterboarding – a technique which simulates drowning - to break down suspected terrorists.
Mukasey himself has described the technique as "repugnant" in written answers to the judiciary committee, but he has avoided stating outright whether or not be believes it constitutes torture.
Bush on defensive
With Mukasey's confirmation increasingly in doubt, Bush has warned that if his nominee is not confirmed the US could face the prospect of a leaderless justice department.
In a speech on Thursday to the Heritage Foundation, a conservative Washington think tank, he defended Mukasey's refusal to define waterboarding as illegal.
|Bush has said Mukasey's appointment is |
essential for national security [Reuters]
"If the Senate Judiciary Committee were to block Judge Mukasey on these grounds, they would set a new standard for confirmation that could not be met by any responsible nominee for attorney general," Bush said.
"That would guarantee that America would have no attorney general during this time of war."
Earlier, speaking to reporters, Bush said Mukasey's appointment as America's top law enforcer was essential to national security.
"It's important for Congress to pass laws and-or confirm nominees that will enable this government to more effectively defend the country and pursue terrorists and radicals that would like to do us harm," he said.
While endorsing what the administration calls "enhanced" interrogation techniques, Bush has repeatedly denied that they spill over into torture.
However, the White House has refused to declare exactly what interrogation techniques it does allow.
Speaking to reporters on Thursday, Bush said it was unfair to ask Mukasey about classified interrogation techniques on which he has not been briefed.
"He doesn't know whether we use that technique or not," the president said, adding: "It doesn't make any sense to tell an enemy what we're doing."