Honoring a longstanding Veterans Day (search) tradition, President Bush placed a wreath Tuesday on the Tomb of the Unknowns to remember the sacrifices of war heroes past and present.

"Today every veteran can be certain: The nation you served and the people you defended are grateful," Bush said during ceremonies at Arlington National Cemetery (search).

"Veterans have a special place. We honor them all for their service in uniform," he said.

The president recognized fallen soldiers of wars gone by and reflected on current sacrifices made by American soldiers in Iraq and Afghanistan.

"Our veterans have borne the costs of America's wars and have stood watch over America's peace," Bush said. "In two years and two months since our country was attacked, the men and women of our forces have engaged the terrorist enemy on many fronts.

"They have liberated two nations: Afghanistan and Iraq, delivering more than 50 million people from the hands of dictators."

Earlier Tuesday, Defense Secretary Donald H. Rumsfeld praised U.S. troops on "Fox and Friends."

"We have wonderful young men and women in service in the Army, the Navy, the Air Force, the Marines," he said. "They've done such a wonderful job and they're proud of what they're doing, and they understand the mission and they feel they're having good success."

Also Tuesday, Bush was signing the Fallen Patriots Tax Relief Act (search), which doubles the tax-free death gratuity payment given to families of fallen soldiers from $6,000 to $12,000.

And he was signing the National Cemetery Expansion Act (search) to help establish new national cemeteries for deceased veterans in southeastern Pennsylvania and in and around Birmingham, Ala., Jacksonville and Sarasota, Fla., Bakersfield, Calif., and Greenville and Columbia, S.C.

On Veterans Day just one year ago, Bush was threatening to commit the "full force and might" of U.S. military against Saddam Hussein unless he quickly disarmed.

This year, the Bush administration continues to search Iraq for weapons of mass destruction. Daily attacks there against remaining coalition troops have pushed the U.S. death toll to nearly 400, with more than half of those since the president declared an end to major combat operations on May 1.

Rumsfeld said the United States has sufficient forces on the ground and that he wouldn't hesitate to recommend more if necessary.

"We're making good progress," he told Fox on Tuesday. "We now have almost as many Iraqi security forces in Iraq as we have Americans in Iraq, something like 125,000 to 130,000. So the total security forces there are increasing."

Gen. Richard Myers, chairman of the Joint Chiefs of Staff, said, "There is no more noble cause than the one that is being fought right now in Iraq and Afghanistan by the members of our armed forces."

Bush's national security adviser Condoleezza Rice on Monday acknowledged an upsurge in violence, especially in the so-called "Sunni Triangle" encompassing Baghdad, Fallujah and Tikrit.

But she said the administration's No. 1 strategy is to increase the number of Iraqis involved in their own security. She said there are now 118,000 trained Iraqi security forces.

Rice denied that major combat operations have resumed.

"What has happened is there are some elements of the old regime that are making common cause with some foreign fighters in what I think could classically be described as an insurgency or insurgency plus terrorism," Rice said.

Secretary of State Colin Powell told students at City College in New York on Monday night that "for the sake of civilization, for our security, we must stay the course" in Iraq.

"There is no question we are being tested," Powell said, but "we will win -- of that there is absolutely no doubt in my mind."

There are an estimated 19 million veterans in the United States, and about 1,500 die each day.

The Associated Press contributed to this report.