By William Douglas and Warren P. Strobel | McClatchy Newspapers

RENO, Nev. — President Bush said Tuesday that "there are unmistakable signs" that his troop buildup in Iraq is working and blasted critics who say that the failure of Iraq's national government to foster political reconciliation proves that the troop increase is failing.

Bush painted a stark picture of what might happen if U.S. troops withdraw from Iraq, saying that would embolden Iran, al Qaida and other extremists to spread instability throughout the Middle East and spur a regional nuclear-arms race that would endanger the world.

"Iran could conclude that we are weak — and not stop them from gaining nuclear weapons," he told the American Legion convention here. "And once Iran had nuclear weapons, it could set off an arms race in the region."

The president's speech appeared to have two objectives: to amplify his warning to Iran that he won't tolerate its aggression, and to build public support for his "surge" policy in Iraq before Congress returns from vacation next week to weigh anew what to do there.

On Iran, Bush was unusually hawkish. He said Iran's regime embodied and sustained one of two strains of radicalism — Shiite Muslim extremism — that threatened the Middle East. The other is Sunni Muslim extremism, led by al Qaida.

"Iran's actions threaten the security of nations everywhere," he said. "We will confront this danger before it is too late."

The president said Iranians were supplying extremists in Iraq with money and weapons that were killing U.S. troops. "I have authorized our military commanders in Iraq to confront Tehran's murderous activities," he said.

Bush gave a more extensive argument to his view that his troop increase is working. He said coalition forces were killing and capturing far more insurgents in recent months, sectarian violence was down, political reconciliation was improving in several provinces, the central government was helping with provincial reconstruction and that electricity production was rising.

"The surge is seizing the initiative from the enemy — and handing it to the Iraqi people," he said.

Yet the president's version of Iraq's reality glossed over the findings in a bleak National Intelligence Estimate released last Thursday. Like Bush, the intelligence report warned that changing the U.S. military mission could have negative results, but it was much less optimistic about chances for national reconciliation. Iraq's government, it predicted, will become "more precarious" over the next six to 12 months.

Bush conceded that the Iraqi national government has failed to achieve political reconciliation, but said there were hopeful signs of progress. He touted "bottom up" reconciliation efforts at local and provincial levels. "As the Iraqis take control over their lives at the local level, they will demand more action from their national leaders in Baghdad. That's how democracy works," he said.

The intelligence report concluded almost exactly the opposite. It warned that strengthening provincial groups, such as the Sunni tribes who have increasingly fought against al Qaida in Iraq, could weaken the national government.

"Such initiatives, if not fully exploited by the Iraqi government, could over time also shift greater power to the regions, undermine efforts to impose central authority and reinvigorate armed opposition to the Baghdad government," it said.

In condemning both Sunni and Shiite extremists, Bush painted both as enemies of the United States but neglected to say that their enmity toward one another is, if anything, more intense.

Sen. Joseph Biden, D-Del., a Democratic presidential candidate and the chairman of the Senate Foreign Relations Committee, faulted Bush's logic in a conference call.

"Today the president argued we have to stay in Iraq to fight extremists. But the fact is his misguided and mismanaged war has fueled extremists in Iraq, Afghanistan and beyond," Biden said. "The al Qaida we failed to finish off in Afghanistan and Pakistan because we went into Iraq has regenerated. It remains intent on attacking us at home. That should have put to rest once and for all the false refrain President Bush keeps repeating, that 'we're fighting them over there in Iraq so we don't have to fight them here.' "

In fact, Bush said that again Tuesday.

Senate Democratic leader Harry Reid of Nevada objected that the president was making an oversimplified argument, noting that most Democrats favor leaving residual forces in or near Iraq to fight terrorists and promote stability. They favor withdrawing U.S. combat troops from the middle of what they consider a sectarian civil war.

"Most Americans, and a bipartisan majority in Congress, believe this (Bush) strategy is not in our national interest and the time for a major change in strategy is now," Reid said in a statement.

The president also asked Congress "to withhold any conclusions" about changing policy in Iraq until after Gen. David Petraeus, the U.S. commander there, and Ambassador Ryan Crocker deliver an assessment on the situation in mid-September.

He noted that the United States has been improving its democracy for 200 years. He conceded that "Iraq's leaders aren't perfect. But they were elected by their people. . . . And leaders in Washington need to look for ways to help our Iraqi allies succeed — not excuses for abandoning them."

(Strobel reported from Washington. Renee Schoof contributed to this story from Washington.)