President Bush (search) on Monday cited last week's bombings on London's mass transit system as fresh evidence of the need to aggressively quash terrorism.

Terrorists that bomb subways or buses or other places that target innocent civilians "are not people you can negotiate with or reason with or appease," Bush told an audience at the FBI (search) training academy in Quantico, Va. "In the face of such adversaries, there is only one course of action: We will continue to take the fight to the enemy and we will fight until this enemy is defeated."

He added: "The attack on London was an attack on the civilized world and the civilized world is united in its resolve. We will not yield, we will defend our freedom."

Bush also delivered a progress report on the War on Terror (search) in his speech. The White House said the address was planned before last week's bombings in London, but the deadly attacks gave his remarks even more significance.

"We face a new enemy — this enemy hides in caves and plots in shadows ... then emerges to strike in our cities and communities ... in cold blood," Bush said, underscoring the new difficulties facing the intelligence community to thwart such attacks.

White House press secretary Scott McClellan said the president wanted to use the speech to talk about two strategies behind the war on terrorism: a short-term plan to fight the terrorists abroad and a long-term strategy to bring freedom and prosperity to the places that produce terrorists.

He spoke before an audience of 1,000 FBI officials, Marines and emergency first-responders. After his remarks, Bush went to shake hands with Attorney General Alberto Gonzales (search), who had been sitting in the front row. The handshake prompted a flurry of picture-taking since Gonzales is rumored as a candidate for the Supreme Court.

"Now why are you taking photos of us?" Bush playfully asked photographers. "One way to get in the paper is to stand next to Gonzales."

Bush's war against the terrorists is a major reason he won re-election last year: Americans came out of the voting booth saying they thought he would do a better job of protecting them from another attack.

It also remains his strength. Americans responded to an AP-Ipsos poll conducted last month by giving the president higher job approval ratings on terrorism than on his handling of the Iraq war, Social Security or other domestic issues.

Yet his approval numbers have slipped in recent months leading up to Monday's speech.

"There will be tough fighting ahead," Bush cautioned. "There will be difficult moments along the path to victory. The terrorists know they can't defeat us on the battlefield. The only way the terrorists can win is if we lose our nerve. This isn't going to happen on my watch."

Bush spoke at Quantico as British Prime Minister Tony Blair (search) said it seems probable the London attacks were carried out by Islamic extremist terrorists.

Bush said the attacks "were barbaric and they provide a clear window into the evil we face."

"We don't know who committed the attacks in London," he said. "But we do know that terrorists celebrate the suffering of the innocent. We do know that terrorists murder in the name of a totalitarian ideology that hates freedom, rejects tolerance and despises all dissent.

"Their aim, the aim of the terrorists, is to remake the Middle East in their own grim image of tyranny and oppression by toppling governments, by exporting terror, by forcing free nations to retreat and withdraw," Bush said.

Bush on Monday also called on Congress to extend provisions of the Patriot Act that are set to expire at year's end.

The Patriot Act (search), Congress' swift reaction to the Sept. 11 attacks, allowed expanded surveillance of terror suspects, increased use of material witness warrants to hold suspects incommunicado and permitted secret proceedings in immigration cases. Now, more than a dozen provisions are set to expire later this year. Congress has begun working on renewing them amid fresh criticism — from members of both parties — that the law undermines basic freedoms.

"The terrorist threats against us will not expire at the end of this year, and neither should the protections of the Patriot Act," Bush said.

"We know that there's no such thing as perfect security and that in a free and open society it is impossible to protect against every threat," the president said.

"As we saw in London last week, the terrorists need to be right only once," he said. "Free nations need to be right 100 percent of the time."

Bush was in Scotland for the annual meeting of leaders of the Group of Eight industrialized nations on Thursday when bombs exploded across London's subway system and on a double-decker bus during the morning rush hour, killing dozens and wounding hundreds more. A little-known group claiming links to the Al Qaeda (search) terrorist network claimed responsibility.

"The War on Terror goes on," Bush told reporters hours after the explosions.

Some have questioned whether Bush's strategy to fight terrorists abroad so "we do not have to face them at home" is working when industrialized nations like Spain, Turkey and Britain are still being hit. Great Britain is a key member of the U.S.-led coalition in Iraq; Spain withdrew its forces from Iraq shortly after the Madrid train bombings last year.

Bush's homeland security adviser, Fran Townsend, defended the strategy during an interview on "FOX News Sunday."

The war in Iraq, she said, attracts terrorists there "where we have a fighting military and a coalition that can take them on and not have the sort of civilian casualties that you saw in London."

The Associated Press contributed to this report.