President Bush said Wednesday that North Korea's continued threats to peace will result in serious repercussions for Pyongyang, and that the United States "reserves all options" to defend against aggression.

In a press conference in the White House Rose Garden, the president said even if North Korea didn't conduct a successful nuclear test, "this claim represents a threat to international peace and security."

Bush said the United States will cooperate with its regional allies on ballistic missile defense and is working with the United Nations to find the right consequences for North Korea's nuclear weapons test.

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The United States "remains committed to diplomacy," and reaffirmed the administration's decision not to use military force to resolve the growing crisis.

"We have no intention of attacking North Korea, but with its actions this week North Korea has once again chosen to reject a process for a better future offered by the six-party joint statement," Bush said, referring to an agreement reached last September between North Korea and Russia, China, Japan, South Korea and the United States.

The United States, Britain and France are seeking a resolution under Chapter VII of the U.N. Charter, which makes sanctions mandatory and opens the possibility of military enforcement. North Korea' s No. 2 leader said Wednesday any pressure from the United States as a response to the nuclear test would be considered a "hostile act."

"If the U.S. keeps pestering us and increases pressure, we will regard it as a declaration of war and will take a series of physical corresponding measures," the North's Foreign Ministry said in a statement carried by the official Korean Central News Agency. The statement didn't specify what those measures could be.

As Bush spoke, U.N. Secretary-General Kofi Annan urged the United States to hold one-on-one talks with North Korea, something the U.S. has refused to do.

Bush said that the U.S. conducted bilateral talks with North Korea in 1994 and it didn't work. The framework agreement signed by the Clinton administration and Pyongyang said North Korea would stop developing nuclear weapons in exchange for light water reactor technology and other assistance.

"And yet we came into office and discovered they were developing a program unbeknownst to the folks with whom they signed the agreement. ... I appreciate the efforts of previous administrations, it just didn't work, and therefore, I thought it was important to change how we approach the problems so that we could do it diplomatically," Bush said.

"We have a better diplomatic hand with others accepting this message than when you do it alone," Bush said of the six-party approach.

Bush added that the latest provocation by North Korea has done more to bring together the international community than ever before.

"One way to make sure that we achieve our objective is to have other people join us," Bush said.

Elsewhere on the globe, Bush said the United States is continuously changing its tactics to deal with the strategic goal of creating a stable Iraq.

"The strategic goal is a country that can defend itself, sustain itself and govern itself.
A strategic goal is to help this young democracy succeed in a world in which extremists are trying to intimidate rational people in order to topple modern governments and extend the caliphate," Bush said.

Bush knocked down a report issued Wednesday by researchers at Johns Hopkins University that suggested that 655,000 people had died since the United States entered Iraq in May 2003. The researchers of the study issued a similar report ahead of the 2004 election, and said they were doing so to impact the election.

"I don't consider this a credible report, neither does General Casey, neither do Iraqi officials. I do know that a lot of innocent people have died and it troubles me and it grieves me," Bush said. "It's now time for the Iraqi government to work hard to bring security in its neighborhoods so people can feel peace."

Acknowledging that the situation in Iraq is "tough on the American psyche," Bush defended himself against charges by Democrats that he doesn't have an exit strategy for Iraq.

Bush said he's never been accused of having a "real sophisticated vocabulary" but the Democratic plan is one of "'cut and run' as far as most Americans are concerned."

That earned derision from Sen. John Kerry, D-Mass., the president's 2004 opponent. Kerry has proposed a deadline for leaving Iraq. He said the stay-the-course strategy is playing into the hands of terrorists.

"President Bush continues to be profoundly wrong about Iraq. He wraps my strategy in slogans because he’s afraid to take responsibility for his Katrina foreign policy that kills and maims our soldiers and weakens America in the fight against terror," Kerry said.

With a month left before the Nov. 7 election, Bush said keeping a Republican leadership in the House and Senate is better for the nation. Democrats need to take a net 15 seats to gain control of the House. In the Senate, they need six.

The president cited strong economic figures that show low unemployment rates and a federal deficit that is half of what it was two years ago. He noted that gas prices are down and tax cuts have helped keep the economy churning.

"These numbers show that we have now achieved our goal of cutting the federal budget deficit in half, and we've done it three years ahead of schedule," Bush said.

He warned that if Democrats get the majority in Congress, they will raise taxes.

"Now, I know they say, 'Only on rich people,' but that's, in my judgment, having been around here long enough to know, it's just codeword. They're going to raise them on whoever they can raise them on," Bush said.

In response to the president's economic numbers, House Minority Leader Nancy Pelosi said the Bush administration's "failed economic policies have resulted in budgets are drastically out of balance and a skyrocketing debt."

"The Bush tax cuts for the super rich have added trillions to the national debt and are mortgaging our children's future," Pelosi, D-Calif., said in a statement. "Democrats know how to restore fiscal discipline with tough policies of pay-as-you-go budgeting, no new deficit spending."

Bush said the nation's economy and national security are the two big issues for voters. He said Republicans are better able to protect Americans because they supported the detainee interrogation program while Democrats opposed it. He said Democrats also oppose the NSA's warrantless wiretapping program that allows investigators to listen to phone calls between suspected terrorists or terrorists sympathizers inside the U.S. and abroad.

"It's very important for our fellow citizens to recognize that I don't question anybody's patriotism. But I do question a strategy that says we can't give those on the front line of fighting terror the tools necessary to fight terror," Bush said. "I still stand by my prediction we'll have a Republican speaker and Republican leader of the Senate."

Bush offered again his support to House Speaker Dennis Hastert, who has been roiled by charges he didn't do enough to stop former Rep. Mark Foley from communicating with teenage House pages. Foley resigned on Sept. 29 after being questioned about e-mails sent to a page. Since then, sexually explicit instant messages between Foley and a former page emerged. Several former pages have come forward to speak with investigators about Foley's contact with them.

"This is disgusting behavior when a member of Congress betrays the trust of the Congress and the family that sent a young page to serve," Bush said of the Foley matter.

The House ethics committee is probing whether any congressional members or staff had information about Foley's behavior and did nothing. Hastert has been asked to resign by several social conservatives who say news of his failure to get more deeply involved is distracting voters from more important issues.

Bush plans to appear with Hastert at a fundraiser in Chicago on Thursday. He said he has full faith in his leadership.

"Denny is very credible as far as I'm concerned," Bush said. "I think the speaker's strong statements have made it clear to not only the party ... but to the country, that he wants to find out the facts."

Bush did not appear concerned that Republican voters will stay home on Election Day, even though his own position on border security hasn't excited the conservative base. The president repeated his long held position that the best way to prevent illegal immigration is to create a guest worker program, but he said he is committed to building 700 miles of actual fencing to protect the southern U.S. border from jumpers.

"We're actually building fence, and we're building double fence in particular areas where there is a high vulnerability for people being able to sneak in," Bush said, adding that he also supports virtual fencing and other technology to help secure the border.

"You can't fence the entire border, but what you can do is you can use a combination of fencing and technology to make it easier for the Border Patrol to enforce our border," he said.