Calling New Orleans, the "city of second chances," President Bush on Tuesday pledged the full cooperation of the federal government to help rebuild the region and called on the city's displaced residents to "come marching back."

"I take full responsibility for the federal government's response. And a year ago, I made a pledge that we will learn the lessons of Katrina and that we will do what it takes to help you recover," the president told Crescent City residents at a high school gymnasium.

Many of the first responders who came to help the trapped residents of New Orleans performed heroic feats of rescue, Bush said, but the death and despair left behind when the floodwaters receded demonstrated it was not enough.

"Unfortunately, the hurricane also brought terrible scenes we never thought we'd see in America," Bush said. "Citizens drowned in their attics. Desperate mothers crying out on national TV for food and water. A breakdown of law and order and a government, at all levels, that fell short of its responsibilities.

"When the rain stopped, this wounded city was laid bare and our television screens showed faces worn down by poverty and despair. And for most of you, the storms were only the beginning of our difficulties."

Earlier, Bush bowed his head in prayer in remembrance of the hundreds who perished in the storm one year ago. He and first lady Laura Bush lit candles of remembrance, then slid into the front pew of the triple-spired St. Louis Cathedral, which was left virtually untouched by the fierce winds and high waters that hit the city.

Click here to read about how New Orleans marked the 1-year anniversary of Katrina.

At 9:38 a.m. Central time, they knelt for a moment of silence to mark the first breaching of the levees, which were supposed to protect the city from the massive flooding brought on by Katrina.

Thoughts of another disaster weren't far from many people's thoughts. Hurricane Ernesto is bearing down on Florida picking up speed as it crosses over the warm waters of the Atlantic Ocean. Click here to read more about Ernesto.

To help people still suffering from Katrina, Bush said the government is working to get federal money quickly to the people. He was applauded loudly when he promised to ask Congress for legislation giving Louisiana a bigger share of royalties from offshore oil and gas drilling. The state now receives less than 2 percent of the royalties, and Gov. Kathleen Blanco and Louisiana's congressional delegation are demanding more.

Bush also tried to enlist companies to return to the city, telling them that they will be rewarded with loyal customers if they start investing now, when New Orleans most needs the infusion of business and cash.

The president said any rebirth of the city must include improvements to the poor-performing school system. In remarks introducing the president, Laura Bush urged teachers nationwide to come to the region to teach.

"We know that families can't move back unless there's schools for the kids and so education is one of the most important parts of the recovery," she said.

"This city occupies a unique place in America's cultural landscape and the recovery won't be complete until New Orleanians return home and their culture is restored," she said.

Visit FOXNews.com's Natural Disaster Center for more coverage on Hurricane Katrina's Aftermath.

The president began a national day of remembrance for Hurricane Katrina victims by meeting with Mayor Ray Nagin in a neighborhood where homes are still stained with high-water marks.

As Bush walked into the packed Betsy's Pancake House in New Orleans, waitress Joyce Labruzzo jokingly asked: "Mr. President, are you going to turn your back on me?"

"No ma'am, not again," he replied to laughter.

Nationally, 67 percent of Americans disapprove of Bush's handling of the Katrina disaster, according to an AP-Ipsos poll earlier this month. In New Orleans, frustration with the state, local and federal response, however, continues to run as deep-seated here as the poverty exposed by the floodwaters, which forced hundreds of thousands from their homes.

The death toll in Louisiana from Katrina is close to 1,600, including nearly 300 who died in other states after fleeing from the hurricane.

In Jackson Square last year, Bush offered three proposals to help fight poverty. One idea carried out, the Gulf Opportunity Zone, is giving $8.7 billion in tax breaks to developers of low-income housing, small businesses and individuals.

But worker recovery accounts, meant to help victims find work by paying for school, job training and child care, didn't materialize. Neither did the Urban Homesteading Act that would have given poor people sites to build homes they would finance themselves or get through programs like Habitat for Humanity.

Only half of New Orleans has electricity. Half its hospitals are closed. Violent crime is up. Less than half the population has returned. Tens of thousands of families still live in trailers and mobile homes with no real timetable for moving to more permanent housing. Insurance settlements are mired in red tape. The city still has no master rebuilding plan. And while 75 percent of the debris has been cleared, some areas look similar to the day the storm struck.

Visit FOXNews.com's Natural Disaster Center for more coverage on Hurricane Katrina's Aftermath.

So far, Congress has approved $110 billion in hurricane aid. The Bush administration has released $77 billion to the states, reserving the rest for future needs, but $33 billion of that has not yet been spent.

The Associated Press contributed to this report.