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President Signs Defense Authorization Bill

President Bush on Monday signed the Pentagon's biggest budget increase in a generation while warning Iraq not to falter on its obligation to the United Nations to disclose its weapons program.

"Our country has unprecedented challenges and we are facing them with unmatched technology, careful planning and the finest traditions of valor," Bush said at a Pentagon ceremony in which he was flanked by Defense Secretary Donald Rumsfeld and several members of Congress. 

"The greatest strength of the American military is the cause we all serve. That cause is freedom in a world of peace. ... We will not rest and we will not relent until freedom is secured," he said.

The Defense Authorization Bill is a milestone for the president, who made the size of the defense budget a measure of his commitment to the nation's security.

The $393 billion measure represents a $30 billion increase over current spending. It includes money for a 4.1 percent pay increase for military personnel and better housing, and includes a $10 billion reserve fund to be used in case of future terrorist attacks, which some members of his administration say are inevitable.

The new law also creates an undersecretary for intelligence at the Department of Defense and honors retiring House Armed Services Committee Chairman Rep. Bob Stump, R-Ariz.

Before signing the bill, Bush warned terrorists that the United States would win the first war of the 21st century, one he said that has departed from traditional battles.  He said this new war is occurring against the "future face of warfare" — forces that are more agile and lethal and who "prey on failed states."

But he said, they can not win this new fight.

"All of the terrorists can be certain of this: Their hour of justice will come and that hour of justice has already arrived for some field generals," he said, referring to Abd al-Rahim al-Nashiri, who is credited with masterminding the hit on the USS Cole and the 1998 U.S. embassy bombings in Kenya and Tanzania.

Bush also issued another warning for Iraqi President Saddam Hussein during the signing ceremony. The president spoke about his continued development of biological and chemical weapons and said the "game is over."

Bush spoke of the importance of Sunday's deadline for Saddam to detail his weapons programs and said that it is not up to inspectors "to play hide and seek with Saddam Hussein" but to verify the evidence.

"It is Saddam Hussein who has the responsibility to provide that evidence, as directed and in full. Any acts of delay, deception or defiance will prove that Saddam Hussein has not adopted the path of compliance and has rejected the path of peace," he said.

So far the signs are not encouraging, Bush added, referring to anti-aircraft weapons fire on Monday aimed at U.S. and British airplanes manning the no-fly zone.

He did not mention the unfolding story in Iraq of weapons inspectors saying that some equipment is missing from one of the inspection sites.

Earlier in the day, White House Press Secretary Ari Fleischer said the United States will be looking for a "full and accurate, complete and credible list of Iraq's weapons," and won't buy the argument that he doesn't have any because the United States has intelligence suggesting otherwise.

"The history of people who accept Saddam Hussein at face value and take his word for accurate is one of disappointment because they've been deceived. Saddam Hussein does not exactly have a track record of telling the world the truth. So he, on December 8, has to indicate whether or not he has weapons. Let's see what he says. If he declares he has none, then we'll know that Saddam Hussein is once again misleading the world," he said.

In their first five days on the ground, U.N. weapons inspectors have reported no problems from Iraq, but Fleischer said that it's too soon to make an assessment of how things are going, nor will he confirm reports that the United States is withholding intelligence information about what officials believe to be Iraqi weapons sites, until after Sunday's declaration to try and catch Saddam in a lie.

Fleischer said Bush is not yet making any judgments on whether those inspections will be successful in disarming Saddam peacefully. Should the inspections route fail, Bush has vowed that the United States will lead allies into war to rid Iraq of any weapons of mass destruction.

"The president is skeptical that Saddam Hussein will comply and it's too soon to say. One week is not adequate time,'' Fleischer said.

 The president signed the defense bill amid reports that the cost of a war with Iraq could top $200 billion. Despite his insistence that the United States won't have to go it alone — that this country will lead a coalition of the willing — there is likely to be much less financial support from other nations than the United States received in fighting the Persian Gulf War a decade ago.

Fox News' Wendell Goler and the Associated Press contributed to this report.