President Bush understands the need for positive steps forward in Iraq and is considering some of the proposals written by outgoing Defense Secretary Donald Rumsfeld two days before resigning, National Security Adviser Stephen Hadley said Sunday.

In that memo, Rumsfeld said it's time for a "major adjustment" in Iraq, saying the actions by U.S. forces currently in Iraq is "not working well enough or fast enough."

In the memo, published in Sunday's New York Times, Rumsfeld follows up with suggestions for rethinking the way the U.S. conducts the war which includes beginning modest troop withdrawals.

Click here to read the full Rumsfeld memo.

Click here to read the full New York Times story.

Hadley said Bush acknowledges that change is needed, but will not use this week's Iraq Study Group report as political cover for bringing troops home.

"We have not failed in Iraq," Hadley said as he made the talk show rounds. "We will fail in Iraq if we pull out our troops before we're in a position to help the Iraqis succeed."

But he added: "The president understands that we need to have a way forward in Iraq that is more successful."

Rumsfeld, showing no indication of whether Bush would actually adopt changes to Iraq policy, proposed having U.S. officials should sell the changes in a way that does not lead to Americans measuring them as successes or failures.

"Announce that whatever new approach the U.S. decides on, the U.S. is doing so on a trial basis," Rumsfeld wrote. "This will give us the ability to readjust and move to another course, if necessary, and therefore not 'lose.'"

In the memo, which gives no indication as to whether Rumsfeld was intending to leave his post at the Pentagon, the defense secretary addresses withdrawal or deployment of troops in Iraq. That differs from his usual statements that U.S. commanders should drive troop levels. Rumsfeld also discusses the possible reduction of bases in Iraq.

He suggests significantly increasing U.S. trainers and embeds within Iraqi forces, initiating a reverse-embeds program, aggressively beefing up the Iraqi ministries of defense and interior and positioning U.S. forces near the Iranian and Syrian borders.

"The president had, as you know, asked agencies to begin a review of our policy in Iraq. And what Secretary Rumsfeld did, I think very helpfully, was put together a sort of laundry list of ideas that ought to be considered as part of that review," Hadley said.

"As it became clear that people were considering options for the way forward, the secretary had some views on the subject, and this memo reflects those views," Pentagon spokesman Eric Ruff told FOX News.

Bush acknowledged the difficulties in Iraq in his Saturday radio address.

"I recognize that the recent violence in Iraq has been unsettling. Many people in our country are wondering about the way forward," Bush said. "The work ahead will not be easy, yet by helping Prime Minister Nouri al-Maliki strengthen Iraq's democratic institutions and promote national reconciliation, our military leaders and diplomats can help put Iraq on a solid path to liberty and democracy."

Bush added: "The decisions we make in Iraq will be felt across the broader Middle East."

The president is under pressure to decide a new blueprint for U.S. involvement in Iraq. A bipartisan commission headed by James A. Baker III, a former Republican secretary of state and Bush family friend from Texas, and former Democratic Rep. Lee Hamilton of Indiana are to present its recommendations to Bush in the coming week.

Anticipating the recommendations, Bush has dismissed the idea of a timetable for troop withdrawal from Iraq, a position that has had wavering support in the Senate.

"I reject any proposal coming out of the Congress, any commission, the Pentagon or any other source that sets a deadline or a timeline," Sen. Lindsey Graham, R-S.C., said on "FOX News Sunday."

But the soon-to-be Senate Foreign Relations Committee Chairman Joe Biden, D-Del., said the president needs to make more sense out of his plan for Iraq both for domestic and international consumption.

"The bottom line is there is no one, including the former secretary, who thought the policy the president continues to pursue makes any sense," Biden said. "The Rumsfeld memo makes it quite clear that one of the greatest concerns is the political fallout from changing course here in the United States politically and how to deal with that."

Several activities are unfolding soon that could effect U.S. policy toward Iraq soon. Besides the ISG report and the president's own study, Bush is stepping up his personal diplomacy in an effort to unite the warring factions in Iraq. On Monday, he sits down at the White House with a top Shiite politician and power broker. Next month, he will reach out to the nation's Sunni vice president.

Meanwhile, Rumsfeld's designated successor, Robert M. Gates, faces confirmation hearings in the Senate later this month, and several lawmakers have said they want to get him in place by the end of the year.

FOX News' Rudy Bakhtiar and Michael De Dora Jr. and the Associated Press contributed to this report.