"Ladies and gentlemen, some may deny the surge is working. But among the terrorists, there is no doubt, al-Queda is on the run in Iraq and this enemy will be defeated," Bush said.

When it came to domestic issues, the president once again urged Congress to pass immigration legislation that included a path to citizenship for many illegal immigrants.

"Illegal immigration is complicated, but it can be resolved and it must be resolved in a way that upholds both our laws and our highest ideals," Bush said.

Bush also asked Congress not to tinker too much with the economic stimulus package he worked out with leaders of the U.S. House.

That would provide tax rebates to most Americans and tax breaks to businesses, in hopes of preventing a recession.

"The temptation will be to load up the bill. That would delay it or derail it and neither option is acceptable," Bush said.