WASHINGTON (AFP) - President George W. Bush laid out plans in his State of the Union speech to spread democracy across the Middle East - - starting with Iraq and a Palestinian state living at peace with Israel.

"To promote peace and stability in the broader Middle East, the United States will work with our friends in the region to fight the common threat of terror, while we encourage a higher standard of freedom," Bush said late Wednesday.

Speaking to a joint session of the US Congress and a television audience of millions, Bush had tough words for Syria and Iran and a rare message to allies Egypt and Saudi Arabia that they, too, must embrace democratic reforms.

Bush said that Sunday´s elections in Iraq had opened "a new phase" for US-led efforts there, and declared that American troops would increasingly play "a supporting role" to fledgling Iraqi security forces.

But he categorically rejected calls to set a specific timetable for pulling the roughly 150,000 US troops from that war-torn country, saying: "That would embolden the terrorists and make them believe they can wait us out."

"In the end, Iraqis must be able to defend their own country -- and we will help that proud, new nation secure its liberty," the president said 22 months after he ordered the invasion to topple Saddam Hussein.

Bush used his annual address to recommit himself to the Middle East peace process and asked lawmakers for 350 million dollars to promote Palestinian political, economic and security reforms.

"The goal of two democratic states, Israel and Palestine, living side by side in peace is within reach -- and America will help them achieve that goal," said the US president.

Bush noted that US Secretary of State Condoleezza Rice was leaving Thursday on a trip that will take her to Israel and the West Bank for talks with Israeli Prime Minister Ariel Sharon and Palestinian leader Mahmud Abbas.

The president´s remarks fleshed out this inauguration promise two weeks ago to spread democracy in the Middle East as the antidote to the extremism that spawned terrorists like those who carried out the September 11, 2001 attacks.

In addition to admonishing Egypt and Saudi Arabia, Bush warned Damascus and Tehran to stop backing terrorism and declared: "To the Iranian people, I say tonight: As you stand for your own liberty, America stands with you."

"The government of Saudi Arabia can demonstrate its leadership in the region by expanding the role of its people in determining their future. And the great and proud nation of Egypt, which showed the way toward peace in the Middle East, can now show the way toward democracy in the Middle East," he said.

Where he had lumped Iran with North Korea and Saddam Hussein´s Iraq in an "axis of evil" in his 2002 State of the Union, Bush said he was working with European allies to defuse the dispute over Iran´s atomic ambitions.

And he made just a one-sentence reference to the crisis over North Korea´s nuclear programs, saying he was cooperating with Asian countries to end the crisis over Pyongyang´s nuclear programs.

Ahead of the speech, White House spokesman Scott McClellan called North Korea´s nuclear program and "past and continuing" sales of weapons technology "a threat to global peace," adding: "We would urge North Korea to return to the six-party talks soon."

Throughout the speech, there were symbolic touches: Some Republican lawmakers had blue dye on their fingers, imitating the purple ink on the hands of Iraqi voters.

In First Lady Laura Bush´s guest box, the mother of a US Marine killed in Iraq hugged the daughter of an Iraqi man slain by Saddam´s secret police in 1996, and the two briefly got tangled when the Marine´s dog tag -- held by his mother -- snagged the Iraqi woman´s sleeve.

On the domestic front, Bush urged the US Congress to help overhaul the beloved government-run Social Security (news - web sites) pension program, which he proposes to partially privatize. The controversial proposal has polarized lawmakers.

Bush also called for fiscal restraint ahead of unveiling his 2006 budget on Monday, when he is expected to propose a virtual freeze on discretionary spending, excluding defense and homeland security.

The president´s remarks were interrupted numerous times by thunderous cheers and applause from Republican lawmakers, while the Democratic ranks remained in stony silence and in some cases, as when Bush rolled out his pension program, even heckled and shouted "No! No!"

In their response to Bush´s speech, top Democratic lawmakers said Bush was on the wrong track in his proposal to reform the pension system, and inadequate in his planning for Iraq.

Senate Minority Leader Harry Reid said Bush´s plan to privatize social security was "dangerous"

because it would add another two trillion dollars on the already record high 4.3 trillion dollars national debt. "That´s an immoral burden to place on the backs of the next generation," he added.

Nancy Pelosi, Minority Leader in the House of Representatives, tackled Bush´s Iraq policy: "We have never heard a clear plan from this administration for ending our presence in Iraq. And we did not hear one tonight."

Pelosi also chided the president for inadequately protecting the homeland from terrorism: "Despite the administration´s rhetoric, airline cargo still goes uninspected, shipping containers go unscreened, and our railroads and power plants are not secure."

"For three years, the president has failed to put together a comprehensive plan to protect America from terrorism, and we did not hear one tonight," Pelosi said.

Leading US dailies on Thursday praised Bush for setting ambitious foreign and domestic goals, but also agreed that his State of the Union speech did not fully address some issues and omitted other more important ones.

While the speech will be remebered for Bush´s "call to stay the course in Iraq and change the course of Social Security," wrote The New York Times, "on both counts, Mr. Bush fudged the most critical points." (Copyright © 2005 Agence France Presse. 02/03/05)