President Bush said that while the United States is at war and its economy is in recession, the state of the union has never been stronger.

Amid roaring applause, Mr. Bush began his State of the Union address before a joint session of Congress, by saying the United States has accomplished much in the four months since the September 11th terrorist attacks.

He said America has comforted victims of the attacks, rallied a great coalition that rid the world of thousands of terrorists, and has saved the Afghan people from a brutal regime. Mr. Bush also welcomed Afghan interim leader Hamid Karzai, who sat near Laura Bush to watch the speech. Mr. Bush said America and Afghanistan are allies against terror. He says the U.S.-led coalition's progress is a tribute to the spirit of the Afghan people.

Mr. Bush said discoveries in Afghanistan have confirmed the world's worst fears and show the war against terrorism is just beginning. He says thousands of dangerous killers, schooled in methods of murder, are spread across the globe like ticking time bombs.

President Bush said the United States will continue striving to shut down terrorist camps and cells wherever they exist.

Mr. Bush said the U.S. military has put Afghanistan's terrorist camps out of business, but that similar camps exist in at least a dozen other countries. The president says groups such as Hamas, Hezbollah, Islamic Jihad, and Jaish-i-Mohammed make up what he calls a "terrorist underworld."

The president said he hopes all nations heed the United States' call to eliminate terrorism, and praised Pakistani President Pervez Musharraf, who he says is cracking down on terror.

Mr. Bush stressed that if other governments do not take steps against terrorism, the United States will.

The U.S leader said another U.S. goal is to prevent regimes that sponsor terrorism from threatening America and its allies with weapons of mass destruction.

Mr. Bush singled out North Korea, Iran, and Iraq as states, who along with their terrorist allies, threaten the peace of the world. He says that by seeking weapons of mass destruction, the three nations pose a grave and growing danger.

The President said he U.S.-led coalition against terror will work to deny terrorists and their state sponsors the ability to manufacture weapons of mass destruction. He says the United States will deploy missile defenses to protect American and its allies from sudden attack.

Mr. Bush warned the war against terrorism cannot be stopped short. He says the United States has been called on to fight freedom's fight.

President Bush says his next budget will include the largest increase in defense spending in two decades.

Mr. Bush said the military needs more of the expensive precision weapons that won the U.S.-led military campaign against terrorism in Afghanistan. He said such weapons defeat the enemy while sparing innocent lives.

The president said his budget will also double funding for homeland security. He said his security strategy depends on improved intelligence, better airport and border security, better emergency response, and new resources to fight bio-terrorism.

He also asked Americans to remain alert to terrorist threats. Mr. Bush noted how shortly before Christmas, passengers and crew aboard a Miami-bound plane spotted and stopped a man trying to ignite explosives hidden in his shoe.

Mr. Bush said another priority of his budget is to provide economic security for the American people.

He said the budget will have to run a deficit in order to achieve his goals of winning the war, protecting the homeland, and revitalizing the U-S economy.

Mr. Bush said his economic security plan can be summed up in one word - jobs.

He said good jobs begin with good schools and he says Congress has achieved historic education reform.

Mr. Bush said the way out of the recession also includes boosting the economy by encouraging investment. He says tax relief must be speeded so people have more money to spend.

Mr. Bush said Congress must act to increase domestic oil production to lessen America's dependence on foreign oil.

Mr. Bush said he will also ask Congress to enact more safeguards to protect pensions so people will not risk loosing their life-savings if their company fails.

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