Updated

In his third State of the Union (search) address, President Bush told Congress and the country that the nation's greatest challenge continues to be the war on terrorism.

Bush said Tuesday night that the American people were rising to the "tasks of history," and that they have proven the state of the union is "confident and strong."

"America this evening is a nation called to great responsibilities. And we are rising to meet them," Bush said. "We have not come all this way through tragedy and trial and war only to falter and leave our work unfinished."

Stopping for applause 72 times, the president maintained a sober delivery of his messages, which didn't provide much basis for grandstanding but are likely to be campaign themes throughout the election year.

Democrats vying for the chance to run against Bush in November blasted the president for a speech they characterized as weak, vague and lacking in a specific plan for combating the national budget deficit and restoring peace in Iraq.

"Bush is in a state of denial about the state of our union," said Sen. Joe Lieberman (search), D-Conn., one of the seven men running for the Democratic presidential nomination. "The America he described as confident and strong is not the America I have seen after traveling this past year."

For more on the Democratic candidates' response, click here.

The morning after the address, Bush was embarking on a two-day swing through Ohio, Arizona and New Mexico to highlight his job training and counterterrorism proposals.

Those were among several plans he said he would offer in his 2005 budget -- a blueprint to be released Feb. 2 that will be constrained by record deficits expected to approach $500 billion this year.

The address contained few major new proposals, underlining the limitations of a budget burdened by deficits and a campaign year in which far-reaching legislative accomplishments probably will be hard to come by.

'America Is on the Offensive Against the Terrorists'

After launching a war on terrorism and laying the groundwork for the war in Iraq in the last two State of the Union addresses, Bush urged Americans to stay the course as the economy continues its comeback and the war begins to show peace dividends.

Bush kicked off the 54-minute-long speech by focusing on an area often criticized by his detractors though frequently cited as his strong suit — national security and the war on terrorism.

"America is on the offensive against the terrorists ... our greatest responsibility is the active defense of the American people," Bush said in the address, which was designated a national special security event by the Department of Homeland Security (search).

Bush said that despite the extra vigilance at home, Americans should not be deluded into a false sense of security.

"Twenty-eight months have passed since Sept. 11, 2001, over two years without an attack on American soil, and it is tempting to believe that the danger is behind us. That hope is understandable, comforting and false," he said.

Bush repeated that U.S. forces and allies are hunting down terrorists wherever they may hide, and that "after the chaos and carnage of Sept. 11, it is not enough to serve our enemies with legal papers."

U.S.-led troops took the fight to Iraq and Afghanistan, where "killers, joined by foreign terrorists, are a serious, continuing danger," Bush said. Despite those dangers, "the men and women of Afghanistan are building a nation that is free, and proud and fighting terror. The work of building a new Iraq is hard, and it is right. And America has always been willing to do what it takes for what is right."

Bush praised the work of the 35 coalition partners who have sent troops to Iraq and thanked U.S. soldiers for capturing 45 of the top 55 most wanted former Ba'athist leaders there.

But Democratic leaders responding to the president said Bush has not done enough to get other nations on board in the war on terror.

"He has pursued a go-it-alone foreign policy that leaves us isolated abroad and that steals the resources we need for education and health care here at home," said House Minority Leader Nancy Pelosi (search). "The president led us into the Iraq war on the basis of unproven assertions without evidence; he embraced a radical doctrine of pre-emptive war unprecedented in our history and he failed to build a true international coalition."

For more on the Democratic response, click here.

The president pointed out that the Kay Report included tens of thousands of documents showing there were weapons program activities in Iraq that were in violation of U.N. rules.

He also responded to criticism that the United States should have stayed out of Iraq by citing non-military progress elsewhere in the world. Specifically, he pointed to Libya and its moves to dismantle its weapons of mass destruction programs and insisted that North Korea eliminate its nuclear program.

"Different threats require different strategies," the president said. "America is committed to keeping the world's most dangerous weapons out of the hands of the world's most dangerous regimes."

In securing the home front, Bush said homeland security and law enforcement personnel should have "every tool they need to defend us," including the Patriot Act, which calls for increased information sharing and seizing terrorist assets.

"I know that some people question if America is really in a war at all. They view terrorism more as a crime, a problem to be solved mainly with law enforcement and indictments ... key provisions of the Patriot Act are set to expire next year. The terrorist threat will not expire on that schedule," Bush said, calling on Congress to renew the legislation.

Democrats argue they can do a better job protecting the home front than the Bush administration, and will focus more on protecting ports and waterways, improving real-time communication among first responders and securing nuclear and other fissile material around the world.

"America will be far safer if we reduce the chances of a terrorist attack in one of our cities than if we diminish the civil liberties of our own people," Pelosi said.

Social Issues Address Conservative Base

Touching on a recent hot potato -- gay marriage and domestic partner benefits -- Bush said, "A strong America must also value the institution of marriage.

"I believe we should respect individuals as we take a principled stand for one of the most fundamental, enduring institutions of our civilization."

Bush noted that Congress passed the Defense of Marriage Act (search), signed in 1996, which defines marriage as a union between a man and a woman and prohibits one state from defining marriage for another state. He said "activist judges" continue to try to alter the law by court order and are "forcing their arbitrary will upon the people."

"The only alternative left to the people would be the constitutional process. Our nation must defend the sanctity of marriage," he said.

'I Refuse to Give Up on Any Child'

Saying the U.S. economy is getting stronger every day, Bush pointed out that under his watch taxes have been lowered, the child-tax credit has doubled, the marriage penalty has been reduced, the death tax is being phased out and taxes on capital gains and stock dividends have been reduced.

"The pace of economic growth in the third quarter of 2003 was the fastest in nearly 20 years," Bush said.

But Bush acknowledged that the key to productivity is building a skilled workforce, which Democrats say has not been done under this president.

Bush called on Congress to help train Americans through his "Jobs of the 21st Century" program, which aims to give extra help to middle and high school students who fall behind in reading and math, will expand advanced placement programs in low-income schools and invite math and science professionals to teach part-time in schools, among other things.

"America's growing economy is also a changing economy," Bush said. "We must respond by helping more Americans gain the skills to find good jobs in our new economy."

Although Bush's No Child Left Behind Act (search) has its critics, Bush said it's working to get results via testing and raising accountability.

"This nation will not go back to the days of simply shuffling children along from grade to grade without them learning the basics," Bush said. "I refuse to give up on any child and the No Child Left Behind Act is opening the door of opportunity to all of America's children."

Health Care, Immigration and Compassionate Conservatism

On health care, Bush proposed a basket of tax credits and incentives to make insurance more affordable. The Democrats have made clear they will make health care a major issue this year, noting that some 43 million Americans are without health insurance.

"Our goal is to ensure that Americans can choose and afford private health care coverage that best fits their individual needs," Bush said. "To make insurance more affordable, Congress must act to address rapidly rising health care costs."

Bush also warned that any attempt to limit the prescription drug choices offered in the 10-year, $400 billion Medicare bill passed by Congress last year "will meet my veto."

He also called on Congress to finish up tax bills still lying around and urged lawmakers to pass legislation to modernize the country's electricity systems, promote conservation and make America less dependent on foreign sources of energy.

Bush also called on lawmakers to reform immigration laws "so they reflect our values and benefit our economy."

The president recently proposed a new temporary worker program he said will help protect the homeland and boost border control efforts. It will "preserve the citizenship path for those who respect the law, while bringing millions of hardworking men and women out of the shadows of American life," Bush said.

Bush said his proposed budget includes new funding to continue community-based strategies to reduce demand for illegal drugs -- school drug testing being a major part of this initiative. He called on team owners, union representatives, coaches and players "to send the right signal, to get tough, and to get rid of steroids now."

In the budget, Bush also proposed a grassroots campaign to inform families of the dangers of sexually transmitted diseases and to double funding for abstinence programs.

Bush touched on his "compassionate conservative" theme, asking lawmakers to codify into law his executive order opening billions of dollars in grant money to competition that includes faith-based charities. He proposed a four-year, $300 million prisoner re-entry initiative to expand job training and placement services to help newly released prisoners get mentoring, including from faith-based groups.

"America is the land of the second chance, and when the gates of the prison open," Bush said as the camera zoomed in on one of his guests, Julio Medina, executive director of Exodus Transitional Community. Medina spent 12 years in prison for selling drugs as a teenager. While there, he obtained a masters degree and when released organized ETC, which offers a safe haven for ex-offenders to seek help and support.

"The path ahead should lead to a better life," Bush said.

Fox News' Jim Angle, Wendell Goler, Liza Porteus and The Associated Press contributed to this report.