WASHINGTON – Defending his war policy, President Bush said yesterday that Iraq is making quiet, steady progress in repairing its shattered economy though reconstruction “has not always gone as well as we had hoped” because of unrelenting violence.

“Rebuilding a nation devastated by a dictator is a large undertaking,” the president said. “It’s even harder when terrorists are trying to blow up that which the Iraqis are trying to build.”

Bush spoke before the Council on Foreign Relations in the second of four addresses to answer criticism about America’s presence in Iraq, where the U.S. death toll has eclipsed 2,100. Bush is laboring under the lowest job approval rating of his presidency, and the speeches are part of a public relations campaign in the run-up to the Dec. 15 vote in Iraq to create a democratically elected government that will run the country for the next four years.

While not admitting errors, Bush spoke about how the U.S. “adjusted our approach” in helping rebuild Iraqi cities. In his speech on Iraq last week, Bush talked about early miscalculations that were made in training Iraqi forces. A majority of Americans now say the war was a mistake, and critics of the administration’s reconstruction strategy say not enough has been done in the nearly three years since the invasion to reduce unemployment, step up oil production and keep the lights on.

“The Iraqi people want jobs, security and basic services, and the president’s words will continue to ring hollow until these urgent needs are met,” Sen. Edward Kennedy, D-Mass., said. “Nearly half of the funds appropriated by Congress remain unspent and millions of dollars have been lost to corruption.”

The president said the U.S. has helped Iraqis conduct nearly 3,000 renovation projects at schools, train more than 30,000 teachers, distribute more than 8 million textbooks, rebuild irrigation infrastructure to help more than 400,000 rural Iraqis and improve drinking water for more than 3 million people.

The U.S.-led coalition also has helped Iraqis introduce a new currency, reopen a stock exchange and extend $21 million in microcredit and small business loans to Iraqi entrepreneurs, he said.

Bush cited Najaf, 90 miles south of Baghdad, and Mosul in northern Iraq – the stage for some of the bloodiest battles of the war – as two cities where headway is being made. In focusing on progress in the two cities, however, Bush did not dwell on violence-scarred cities like Baghdad or western expanses that have been a gateway for foreign militants.

He said victory will be achieved when insurgents and others seeking to derail democracy in Iraq can no longer threaten the future of the nation, when Iraqi security forces can safeguard their own citizens and Iraq is not a haven for terrorists plotting attacks against the U.S. Yet, Democrats argue that U.S. engagement in Iraq is open-ended, costly in terms of lives and dollars, and they say the president refrains from giving the American people an idea of when U.S. troops might be able to return home.

Rep. John Murtha, D-Pa., a longtime hawk on military matters who now wants U.S. troops pulled out of Iraq, said the military has told him it plans to ask for $100 billion more for the war next year. That’s in addition to the $50 billion that Congress is expected to approve for this year before adjourning, and the $200 billion that lawmakers already have given the president for Iraq since 2003.

“It’s been poor planning from the start,” Murtha said.

Pentagon spokeswoman Cheryl Irwin said “it would be premature” to discuss next year’s budget, which the administration has not completed. Military commanders have told the administration the next $50 billion should last through Memorial Day.

Bush rebutted Democrats who want to withdraw U.S. troops on a timetable.

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And he criticized those such as Democratic Party Chairman Howard Dean, who has likened the war to Vietnam and has said, “The idea that the United States is going to win the war in Iraq is just plain wrong.”

“There will be good days and there will be bad days in this war,” Bush said. “I reject the pessimists in Washington who say we can’t win this war.”

While the president focused on progress on the economic front, he admitted that the U.S. has learned that to gain control of Iraqi cities, it also has to win the “battle after the battle” by helping Iraqis consolidate their gains and keep terrorists from returning.

“We found that after we left, the terrorists would re-enter the city, intimidate local leaders and police and eventually retake control, so we adjusted our approach,” Bush said. “As improvements in training produced more capable Iraqi security forces, those forces have been able to better hold onto the cities we cleared out together.”