In Chicago, Obama said the US government could not leave the industry to collapse, saying it would have a "devastating ripple effect" throughout the US economy.
|Car manufacturer executives say their firms will collapse if no bailout is passed [Reuters]
Dana Perino, the White House spokeswoman, echoed Obama's statement, saying the US cannot afford a car industry meltdown as it was "something our economy can't withstand at the moment".
"We believe that the economy is in such a weakened state right now that adding another possible loss of one million jobs is just something our economy cannot sustain at the moment," she said.
The so-called "Big Three" Detroit-based car makers - Ford, Chrysler and General Motors, have spent weeks pleading with US politicians to assist their ailing firms, saying their collapse could devastate the economy and cause millions of job losses.
All have been criticised for failing to restructure and adapt to the market by providing more fuel-efficient vehicles.
Negotiations between all sides are expected to continue on Thursday, with Bush continuing to lobby for support, Perino said.
"The president and others are reaching out to senators today [Thursday], listening to their concerns, listening to their questions, trying to answer their questions as best we can, making the case [for the legislation]," she said.
'Offer an alternative'
Harry Reid, the senate majority leader for the Democrats, challenged Republicans to offer an alternative rescue measure of their own if they could agree on one.
"I think it is only fair, if the minority, the Republicans, want a better bill, they should offer an alternative," he said on Thursday.
Bob Corker, a Tennessee Republican, proposed a measure that would give loans to car makers with a provision that GM and Chrysler debt must be cut by two-thirds by March 15 or they must file for bankruptcy.
The move would require a cut in pay for trade union workers, which would encounter resistance from pro-union Democrats.
Rob Reynolds, Al Jazeera's Washington correspondent, said some Republicans were being open about their desire to see trade unions take a "big hit" on the issue.
GM and Chrysler are seeking billions of dollars by the end of the month just to survive while Ford is asking for a line of credit if its finances worsen more than expected in 2009.
Under the proposed bailout terms - which could be amended to pass the bill through the senate - the loans are intended to assist the firms until the end of March 2009, after which future help would depend on the quality of restructuring plans demonstrating their viability.
A presidentially appointed trustee, or "car czar" would enforce the loan conditions and judge the restructuring plans and could recommend bankruptcy if he or she deemed the companies' plans to be insufficient.