Republicans and Democrats were earlier said to have agreed in principle to a bailout plan for the US economy.

Senator Chris Dodd, a Democrat and chairman of the Banking Committee, said after a two-hour negotiating session: "We are very confident that we can act expeditiously."

Bob Bennett, a Republican, said: "I now expect that we will indeed have a plan that can pass the House, pass the Senate [and] be signed by the president."

The plan, which had previously been mooted as costing as much as $700 billion, could be passed in the next few days.

Candidates meeting

Bush spoke before meeting with presidential rivals Obama and McCain for emergency talks on the US economy.

Bush is hoping to attain their support for the bailout plan.

A day earlier Bush said that the US is in the middle of a serious financial crisis that could push the economy into a long-term recession if the government does not act.

In a televised address on Wednesday aimed at persuading the public to support the $700bn financial bailout being negotiated with congress, George Bush reiterated that urgent action was needed to bolster the markets.

Explanation wanted

But critics said Bush had to explain why the financial mess happened on his watch.

"It is time for him to explain why his administration sat on its hands for months and only now has come to realise the need for immediate and unprecedented government action," Harry Reid, the Democratic senate majority leader, said before Bush's address.

Bush said his "natural instinct" was to oppose government intervention in the financial sector, but the financial turmoil called for a different approach.

"I believe companies that make bad decisions should be allowed to go out of business," Bush said. "Under normal circumstances, I would have followed this course. But these are not normal circumstances."

He cited a market that was not functioning properly, a widespread loss of confidence and major financial sectors at risk of shutting down.

More financial distress could lead more banks to fail, the stock market to drop further, businesses to close, job losses and home values to drop, Bush said.

"And, ultimately, our country could experience a long and painful recession," Bush said. "Fellow citizens, we must not let this happen."

'Really bad stuff'

The bailout plan has been hammered out by the Bush administration and congress. It is hoped that the plan would allow the government to step in and buy up bad mortgage-related debts from financial institutions, including US subsidiaries of foreign banks, to try to stem the financial storm.

But the plan has drawn criticism, even from the president's supporters.

"I love and support the president, but I am not with him on this," Jack Burkman, a Republican strategist, told Al Jazeera.

"Everybody knows recessions are important. You need them. They're part of the business cycle. Congress should never be in the business of trying to sweep things away ... and I like the way congress is coming together in a bipartisan way to defeat this nonsense," he said.

"This is really bad stuff - I don't think the US is in the shape that the treasury secretary describes."

The bail-out package unveiled late last week triggered a temporary rally in global stocks but concerns over if and when congress would approve the plan and uncertainty about its final form quickly eclipsed that optimism.

The unprecedented bail-out has come under heavy fire from legislators from both parties and Americans sceptical about providing a lifeline to Wall Street when homeowners and ordinary Americans are suffering.