The new Iraqi interim government brings the country "one step closer" to democracy, President Bush said Tuesday, promising to "stand by the Iraqi people" as long as it takes to stabilize the nation.

Administration officials also said the establishment of the new government is a huge step in helping the United States win support for a new U.S.- and Britain-backed U.N. resolution aimed at making the country more stable. Delegates met at the United Nations on Tuesday for consultations at the request of Britain.

The new team of leaders "represents the talent, commitment and resolve to guide Iraq through the challenges that lie ahead," Bush told reporters from the Rose Garden at the White House.

"The naming of the new government brings us one step closer to realizing the dream of Iraqis -- a fully sovereign nation with a representative government that protects their rights and serves their needs," Bush continued. "This is a very hopeful day for the Iraqi people … [and] for the American people."

At the United Nations, Secretary-General Kofi Annan (search) said the process of choosing an Iraqi interim government wasn't perfect but the United Nations did "exactly what we set out to do."

Annan said it was clear from the start that the United Nations would be discussing the makeup of the new government with the U.S.-led Coalition Provisional Authority (search), the Governing Council and other Iraqi constituencies.

"It was never intended that the United Nations will go and appoint and impose a government on the Iraqis," he said. "We have to discuss it, and given the circumstances and the factors on the ground, it is not surprising that you have a mix of people from the Governing Council and from outside who are forming the new government."

When asked about Bush's comment that U.N. envoy Lakhdar Brahimi (search) was "the quarterback" of the selection process, U.N. spokesman Fred Eckhard stressed it was the coalition that was primarily responsible.

Annan said the fact that some exiles emerged as key leaders came out of the process of consultation.

"It was not the United Nations that imposed them on Iraq or on the people," Annan said, "and I think it would be wrong to say that the United Nations has allowed itself to be used."

Iraqi Foreign Minister Hoshiyar Zebari was heading to New York to press the council for full sovereignty.

Bush: 'The Terrorists Can't Win'

Bush on Tuesday cautioned that the transfer of authority to a new interim Iraqi government could be accompanied by an increase, rather than a lessening, of violence.

"There's still violent people who want to stop progress. Their strategy hasn't changed. They want to kill innocent lives and shake our will. They're not going to shake our will," Bush told reporters after the naming of the new 33-member Iraqi government.

"This is a very hopeful day for the Iraqi people and the American people. It's going to send a clear signal that terrorists can't win," the president said.

Bush said he had "no role" in the selection of the leaders. But he said he believed the formation of the new government would help ease the way for a new U.N. resolution seeking to set the stage for stability in Iraq. The president said he had spoken earlier in the day with Annan to praise the work done by the United Nations in helping to assemble the new government.

In particular, Bush praised the work of Brahimi.

"Consulting with hundreds of Iraqis from a variety of backgrounds, Mr. Brahimi has recommended a team that possesses the talent, the commitment and the resolve to guide Iraq through the challenges that lie ahead," Bush said.

Earlier, his national security adviser, Condoleezza Rice, called the new government "a positive step for the future of a free Iraq."

"These are not America's puppets," she said.

Resolution Wars

Calling Tuesday "a good day for the Iraqi people," Secretary of State Colin Powell told reporters "we will now move forward with our work on the resolution."

Powell said U.S. and British officials would consult the new Iraqi government on the basis of which coalition forces will be in Iraq and the future relationship between the new government and coalition military forces.

U.S. Ambassador John Negroponte has called the U.S.-British draft "a good resolution" that could be fine-tuned but doesn't need to be rewritten.

State Department spokesman Richard Boucher said the new resolution would make clear the Iraqi interim government "will be fully sovereign," with control over its natural resources and authority over the national police force. It also makes clear that the objective is for Iraqis to progressively assume responsibility "for maintenance of security and stability in Iraq," he said.

The revised draft will include a U.S. pledge to respect the interim government's decision on whether the multinational force stays or leaves, Boucher said. It will also specify that the force's mandate will end after democratic elections under a new constitution, but will also make clear the council will end the force's mandate earlier if requested by the transitional government, he added.

Many other council members have called it a good starting point, and a Chinese proposal and comments by the French, German and Russian ambassadors clearly indicate they want substantive changes.

Bush called German Chancellor Gerhard Schroeder on Memorial Day, urging that the two nations work together on the resolution.

A senior government official in Germany said that Schroeder told Bush that Germany would "work constructively" on a U.N. resolution paving the way for an Iraqi government.

But the German official said it was too early to tell whether a deal would come before Bush hosts the Group of Eight summit of leading industrial nations next week.

Iraq 'Moving Forward'

Bush said that while the interim Iraqi council was being given "full sovereignty," U.S. troops would remain. He cited comments earlier in the day by Iraq's new prime minister, Iyad Allawi (search), that Iraq needs help from coalition forces to help defeat "the enemies of Iraq."

"I am confident" that the new Iraqi leadership wants the U.S. military to remain, Bush said. "People on the ground ... the Iraqis, feel comfortable in asking us to stay."

"The naming of the new interim government brings us one step closer to realizing the dream of millions of Iraqis: a fully sovereign nation with a representative government that protects their rights and serves their needs," Bush said.

Earlier, Rice hailed the development, calling it "a positive step for the future of a free Iraq."

Rice said she believed nations that had been skeptical of U.S. policy on Iraq might now be more willing to support such a U.N. resolution, given the changed political landscape in Iraq. "I do believe people see this as now moving forward," she said.

The Associated Press contributed to this report.