WASHINGTON - President Bush told Americans on Monday night that his strategy to stabilize Iraq is achieving results "few of us could have imagined just one year ago," even as he sought to reassure the public that his new stimulus plan will stave off the recession that threatens to overtake the nation's economy during the final year of his presidency.

Appearing before Congress for his seventh and last State of the Union address, Bush claimed vindication for his controversial decision a year ago to send a "surge" of about 30,000 additional troops to Iraq.

"The enemy is still dangerous and more work remains," Bush acknowledged, but with high-profile attacks, sectarian violence and civilian deaths falling, he said, progress is unmistakable.

"Some may deny the surge is working," Bush said, "but among the terrorists there is no doubt. Al-Qaida is on the run in Iraq, and this enemy will be defeated."

Bush made clear he is not ready to accelerate a drawdown of U.S. forces, which are scheduled to return to pre-"surge" levels of 130,000 by mid-summer. He cited a warning from Gen. David H. Petraeus, the top U.S. commander in Iraq, that pulling troops out too quickly risks the recovery of al-Qaida in Iraq and an increase in violence.

"Members of Congress," he implored, "having come so far and achieved so much, we must not allow this to happen."

Bush's address highlighted the shifting priorities of an administration that had planned to focus its final year on the war and other international challenges but has found itself moving quickly in the past month to address the burgeoning crisis in the economy.

The past year has brought a growing tide of bad economic news for the Bush administration, culminating in last week's global stock market panic over a collapsing housing market and other financial woes in the United States.

Bush called on Congress to finish work quickly on a $150 billion stimulus package, urging lawmakers not to "load up" the initiative with measures beyond the tax rebates and business incentives he agreed to last week with House leaders. "That would delay it or derail it, and neither option is acceptable," Bush said.

The president sought to calm citizens' financial fears. "Our economy is undergoing a period of uncertainty, and at kitchen tables across our country, there is concern about our economic future," Bush said. But, he added, "In the long run, Americans can be confident about our economic growth."

Modest proposals

The president did not seek to revive the kind of ambitious social reforms that animated his past State of the Union addresses, such as proposals to create private accounts for Social Security or provide a pathway to citizenship for illegal immigrants. Instead, he offered a mixture of familiar initiatives, mixed in with modest new proposals on education, social services and assistance for military families, that his aides said stand a reasonable chance of approval before this summer's political conventions start in late August.

One new proposal would devote $300 million to new grants for poor children to attend religious schools. Bush proposed writing into law the rules requiring federal agencies to give equal consideration to religious-based groups providing social services to the poor.

Bush, whose administration has come under fire in recent years over the poor treatment of injured soldiers, also unveiled several initiatives aimed at boosting federal assistance to families of veterans and active service members. One proposal would give hiring preferences to military spouses throughout the federal government; another would allow soldiers and veterans to transfer unused GI education benefits to spouses and children.

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