The United States and its coalition partners are getting Iraq back on its feet, thanks to the help of thousands of military reservists and National Guardsmen (search), President Bush said Thursday.

"You're serving in a time of testing for this nation and we're meeting the tests of history," Bush told a rousing crowd of guardsmen and their families in New Hampshire. "The challenges we face today cannot be met with timid actions or bitter words."

Noting that "we live in an era of new threats," the president said part-time military volunteers are playing vital roles in homeland security missions such as guarding terror suspects at Guantanamo Bay (search).

"Citizen soldiers are serving on every front of the war on terror and they're making their state and your country proud," Bush said.

Campaigning to counter rising criticism about Iraq, Bush praised postwar developments there and thanked military reservists -- normally accustomed to weekend training missions but now straining under long overseas deployments.

"Serving your country can bring sacrifice and uncertainly and separation. Your lives can be changed in a moment with the call to duty. I want to thank you for your willingness to heed that important call," he said.

Bush and his aides have recently complained that most news outlets have been filtering out all the good news coming out of Iraq and instead focusing mainly on security problems and U.S. casualties.

"Life is getting better. It's a lot better than you probably think," Bush said. "Just ask people who've been there … the stories they tell are a lot different than the perceptions of what you're being told life is like."

The president noted that schools are being rebuilt, all hospitals are now open, children are receiving immunizations and electricity and water are being restored.

'Wars Are Won on the Offensive'

Bush defended his administration's "first-strike doctrine," which says the United States will take the offensive against any country, dictator or group that poses a serious threat to national security.

"This is a new kind of war and we must adjust ... and America's following a new strategy," he said. "We're not waiting for further attacks. We're striking our enemies before they can strike us again … wars are won on the offensive."

He noted that two-thirds of Al Qaeda (search) leaders have been either killed or captured and the U.S. military's deck of 55 most-wanted Iraqis is quickly dwindling.

"We're rolling back the terrorist threats," said the commander-in-chief. "We're making good progress."

On the 6-month anniversary of the day U.S. tanks rolled into the heart of Baghdad and helped Iraqis pull down a huge statue of Saddam Hussein, Bush said waiting for Saddam to act against the United States was not an option.

"I acted because I was not about to leave the security of the American people in the hands of a madman," Bush said. "I was not about to stand by and wait and trust in the sanity and restraint of Saddam Hussein."

He noted that terrorists have struck not only at U.S. interests both at home and abroad, but also at western symbols in Casablanca, Jerusalem, Riyadh, Baghdad, Bali and Jakarta.

"The danger hasn't passed," Bush said. "The terrorists continue to plot and plan against our country and our people … America must not forget the lessons of Sept. 11.

"America cannot retreat from our responsibilities and hope for the best. Our security will not be gained by timid measures ... America has only one option: We must fight this war until our work is done."

Despite mounting criticism that no weapons of mass destruction have yet been found in Iraq, Bush pointed out that weapons investigators have found evidence of clandestine biological weapons labs in Iraq, long-range missiles and other evidence of a campaign to hide illegal programs.

"There's still much to investigate, yet it is now undeniable that Saddam Hussein was in clear violation of U.N. Security Council Resolution 1441," Bush said, referring to the measure that authorized the international body to use military force against Saddam if he wasn't truthful about his illegal weapons program. The Security Council ultimately failed to vote to use force.

'We Must Create Jobs'

Bush also touted his economic plan, including the already enacted package to allow higher expense deductions for small businesses, reduction of the marriage penalty and increased child credit and tax cuts.

But he urged Congress to act quickly on measures to stimulate job growth.

"We're moving forward but we are not satisfied. We can't be satisfied so long as we have fellow citizens who are looking for work," he said, noting that one out of every five manufacturing jobs in New Hampshire has been lost.

"That's an issue we must deal with. We must act boldly from this point forward to create jobs in America."

Bush wants Congress to pass his six-point economic plan, including measures to control rising health-care costs, reduce junk lawsuits and establish a sound energy policy less dependent on foreign sources.

As of Wednesday, 166,046 National Guard members and reservists were on active duty, mostly deployed to hot spots in the war on terror like Iraq and Afghanistan.

The reluctance of U.S. allies to send more troops to Iraq has caused greater pressure on members of the National Guard and reserve units. Pentagon officials say they may have to activate thousands more reserve troops in coming weeks to augment troops in Iraq.

The United States is pushing a U.N. Security Council resolution that calls for more international troops to be sent to Iraq to serve as peacekeepers and to boost Iraqi security forces. But many countries want the United States to cede control over military and civilian operations to the United Nations and the Iraqis themselves.

The White House said Thursday that it expects an international donors conference aimed at raising money to help with Iraq's reconstruction to take place as scheduled later this month in Madrid, Spain.

In a separate address Thursday to the Greater Manchester Chamber of Commerce, Bush was expected to stress economic progress, telling business leaders that the economy is moving in the right direction, White House spokeswoman Claire Buchan said.

Sen. Judd Gregg, R-N.H., whose wife was earlier this week abducted from her Washington-area home by burglars, was also expected to speak at that event.

On the state-by-state map of the 2000 presidential election, New Hampshire was the only Northeastern state to vote for Bush. The trip is Bush's fourth to New Hampshire as president.

Bush was also raising money in Lexington, Ky., Thursday for Rep. Ernie Fletcher, who is tied in polls with Democrat Ben Chandler in the race for Kentucky's governor.

Fox News' Liza Porteus and The Associated Press contributed to this report.