President Bush on Saturday hailed a new interim constitution as "excellent progress" toward democracy in Iraq (search), painting an upbeat picture that ignored the cancellation of Friday's scheduled signing of the document.

An elaborate ceremony planned by U.S. and Iraqi officials for Friday was scotched indefinitely after Iraq's top Shiite cleric, Grand Ayatollah Ali al-Husseini al-Sistani (search), rejected portions of the charter. The enactment of an interim constitution represents a key step in the U.S. plan to hand over power to Iraqis on June 30.

Bush, delivering his weekly radio address, didn't mention the unwelcome developments at all.

"A year ago, Iraq's only law was the whim of one brutal man," he said. "When the new law takes effect, Iraqis will, for the first time in decades, live under the clear protections of a written bill of rights."

While that plan called for an interim constitution to be in place by Feb. 28, the White House on Friday claimed the delay posed no danger to the ability to meet the June 30 transfer date.

Instead, saying the problems among Iraqi Governing Council (search) members over the charter involved only "technical matters" that they already were working to resolve, White House press secretary Scott McClellan insisted the dispute itself was a sign of "democracy in action."

"It's not unusual when a society is working to build democratic institutions that there are going to be bumps along the road," McClellan said. "But the important thing is that Iraqi leaders are able to freely discuss these issues with one another and do so publicly without the threat of brutal action by an oppressive regime."

There were some signs, however, that the Shiite objections were broad. It was not clear when — or how — they would be overcome.

Despite those doubts, Bush told his radio audience the charter "will establish a clear path" for this year's transition to Iraqi sovereignty and a fully representative and free Iraqi government by the end of 2005.

"The Iraqi people are making excellent progress," he said. "Difficult work in creating a new Iraqi government remains. Yet Iraqis are equal to the tasks before them."

Bush also said Tuesday's homicide bombings of Shiite shrines in Baghdad and Karbala, which killed at least 181, were the work of both supporters of the former Saddam Hussein regime and foreign terrorists. He pointed to Abu Musab al-Zarqawi, a Jordanian militant with Al Qaeda links, as "one of the terrorist leaders," suggesting he was to blame for the attacks.

Some U.S. officials have said the role of foreign militants in the attacks was still unclear.

"Laura and I and the American people were filled with grief and anger at these terrible acts of murder, which took the lives of dozens of innocent Iraqis," Bush said. "The killers' strategy will fail."