President Bush signed into law Tuesday new guidelines for interrogating and prosecuting terror suspects, the final step in a process that started after the Supreme Court in June struck down the administration's plan to conduct military tribunals for Guantanamo detainees.

The Military Commisions Act will save lives and give terror suspects a full and fair trial, Bush said in the East Room ceremony.

"In memory of the victims of September 11, it is my honor to sign the Military Commissions Act of 2006 into law," Bush said before sitting down to put pen to paper.

"It is a rare occasion when a president can sign a bill he knows will save American lives. I have that privilege this morning," Bush said in heavily attended remarks. The president stood with Vice President Dick Cheney, Defense Secretary Donald Rumsfeld and other Pentagon officials.

The bill allows the CIA to continue its program for questioning key terrorists leaders and operatives like Khalid Sheik Mohammad and Ramzi Binalshibh, who are believed to have led the planning and execution of the Sept. 11, 2001, terror attacks that killed nearly 3,000 people.

"With this bill America reaffirms our determination to win the War on Terror. The passage of time will not dull our memory or sap our nerve. We will fight this war with confidence and with clear purpose. We will protect our country and our people. We will work with our friends and allies across the world to defend our way of life. We will leave behind a freer, safer and more peaceful world for those who follow us," Bush said.

Bush said he insisted on Congress codifying the CIA interrogation program because it "has been one of the most successful intelligence efforts in American history" and must continue to be a "vital tool to protect the American people for years to come."

The bill was approved by Congress after the Supreme Court ruled in June 2006 that the military tribunal system Bush had established to try detainees at Guantanamo Bay, Cuba, violated Geneva Conventions to which the United States is bound. Approximately 440 detainees are at Guantanamo Bay.

The legislation became public law six weeks after Bush acknowledged that the CIA had been secretly interrogating suspected terrorists overseas and pressed Congress to quickly give authority to try them in military commissions.

"The legislative and executive branches have agreed on a system that meets our national security needs. The Military Commissions Act will provide a fair trial in which the accused are presumed innocent, have access to an attorney and can hear all the evidence against them," Bush said, calling the commissions system lawful, fair and necessary.

Under the law, detainees will not be allowed to challenge their imprisonment in federal civilian courts. Human rights groups have voiced concern that the bill's language could allow tough interrogation techniques that come close to torture.

The bill would protect detainees from blatant abuses during questioning — such as rape, torture and "cruel and inhuman" treatment — but does not require that any of them be granted legal counsel.

Bush said before signing the bill that torture is explicitly banned under the bill. But speaking to FOX News' Bill O'Reilly in a one-on-one interview airing Tuesday, the president would not elaborate exactly which techniques are being used and would continue to be allowed.

"We don't talk about techniques. And the reason we don't talk about techniques is because we don't want the enemy to be able to adjust. We're in a war. ... But I do assure the American people that we were within the law and we don't torture — I've said all along to the American people we won't torture. But we need to be in a position where we can interrogate these people," he said.

White House press secretary Tony Snow said after the bill was signed Tuesday, the government would immediately begin moving toward the goal of prosecuting some of the high-value suspects being held at the U.S. detention center at Guantanamo Bay. He expected it would take a month or two to get "things moving toward a trial phase."

"In terms of having trials, for good and obvious reasons, you don't do that overnight," Snow told reporters. "You do have to make sure that the defense is going to be able to do its job properly and the prosecution the same."

The bill sets up separate rules than some common in military and civilian courts. For instance, the commission would be allowed to consider hearsay evidence so long as a judge determined it was reliable. Hearsay is barred from civilian courts.

The legislation also says the president can "interpret the meaning and application" of international standards for prisoner treatment, a provision intended to allow him to authorize aggressive interrogation methods that might otherwise be seen as illegal by international courts. Snow said Bush would probably eventually issue an executive order that would describe his interpretation.

The legislation applies to those selected by the military for prosecution and leaves mostly unaffected the majority of the 14,000 prisoners in U.S. custody, most of whom are in Iraq. Among those who will be tried are 10 prisoners who have been at Guantanamo Bay prison and some or all of the 14 suspects held by the CIA in secret prisons and recently transferred to Guantanamo.

"With our actions, we will send a clear message to those who kill Americans: We will find you and we will bring you to justice," Bush said.

Legal challenges are expected. As the president was signing the bill, the American Civil Liberties Union issued a statement calling itself "the most conservative organization in America" because of its fight to preserve the system of checks and balances and defend the Bill of Rights.

ACLU Executive Director Anthony D. Romero said Bush was enacting a law that was "both unconstitutional and un-American."

"Nothing separates America more from our enemies than our commitment to fairness and the rule of law, but the bill signed today is an historic break because it turns Guantanamo Bay and other U.S. facilities into legal no-man's-lands," Romero said.

"The president can now — with the approval of Congress — indefinitely hold people without charge, take away protections against horrific abuse, put people on trial based on hearsay evidence, authorize trials that can sentence people to death based on testimony literally beaten out of witnesses and slam shut the courthouse door for habeas petitions. Nothing could be further from the American values we all hold in our hearts than the Military Commissions Act," he said.

The signing ceremony offered Bush the chance to bask in a legislative victory. About 150 people were invited to the White House for the event, including the chairmen of the House and Senate Armed Services Committees and Sen. Lindsey Graham, who worked with Sens. John Warner and John McCain to ease some of the more restrictive rules approved in earlier drafts. McCain, a former POW and one of the key advocates for demanding Geneva Convention standards are maintained, was not present at the signing ceremony.

Many Democrats opposed the legislation because they said it eliminated rights of defendants considered fundamental to American values, such as a person's ability to go to court to protest their detention and the use of coerced testimony as evidence.

Bush praised those Democrats who split from their party to pass the bill, thanking them "for their conviction, for their vision and for their resolve."

FOX News' Greg Kelly and The Associated Press contributed to this report.