Saturday marks one year since President Bush (search) landed on the deck of the USS Abraham Lincoln (search) and, under a banner proclaiming "Mission Accomplished," declared an end to major combat in Iraq.

The president still stands by the words he used to mark the ouster of Saddam Hussein, but with multiple insurgencies in Iraq and a difficult transformation to an orderly democratic state, Bush acknowledged Friday that the situation is still tenuous.

"We face tough times in Iraq," Bush said during a Rose Garden press conference with Canadian Prime Minister Paul Martin (search). "And we've had some tough fighting because there are people who hate the idea of a free Iraq"

But, Bush added, "We're making progress, you bet. There's a strategy toward freedom ... Whether it be in Fallujah or elsewhere, we will deal with them, those few who are stopping the hopes of many."

April 2004 was the bloodiest month in Iraq since coalition troops first landed more than a year ago. At least 136 U.S. soldiers died in fighting, most of which took place in the Sunni Triangle city of Fallujah (search), where insurgents have been battling U.S. forces for weeks.

Asked if things are getting better or worse, Bush reminded reporters that he never said aboard the Lincoln that the job was done.

"A year ago, I did give the speech from the carrier saying that we had achieved an important objective, that we had accomplished a mission, which was the removal of Saddam Hussein. And as a result, there are no more torture chambers or rape rooms or mass graves in Iraq. As a result, a friend of terror has been removed and now sits in a jail. I also said on that carrier that day that there was still difficult work ahead," he said.

The president did not say the worst was yet to come. Instead, he acknowledged the commitment of the U.S. troops.

"Their sacrifice will not go in vain because there will be a free Iraq," Bush said.

Critics have derided the banner's declaration while Democrats have accused the president of creating a quagmire that has no exit strategy. Presidential candidate John Kerry (search) said Bush now faces a "moment of truth."

"This anniversary is not a time to shout. It is not a time for blame," Kerry said at Westminster College (search). "It is a time for a new direction in Iraq and for America to work together so that once again this nation leads in a way that brings the world to us and with us in our efforts."

The administration also faced an embarrassment when new evidence revealed that some American prison guards were mistreating Iraqi inmates. Pictures of guards forcing inmates to be photographed naked while facing various other humiliations have been widely broadcast in the Middle East and Europe, adding to the suspect image of America among the Arab world.

Bush said he was deeply disturbed by the photos.

"I share a deep disgust that those prisoners were treated the way they were treated," Bush said.

Bush promised an investigation and pledged that those responsible would be disciplined. So far, 17 soldiers have been suspended. The Army general in charge of the prison may also face disciplinary action, though officials said they doubt she would face criminal charges.

Bush said he's determined the pictures won't tarnish the image of the vast majority of the U.S. military.

"Their treatment does not reflect the nature of the American people. That's not the way we do things in America. I didn't like it one bit."

Currently, 138,000 U.S. troops are in Iraq and 24,900 troops are stationed there from coalition countries. The United States has lost at least 738 troops since the war began in March 2003.

Of the war casualties, Bush said: "Any time you talk about somebody who died in Iraq or in Afghanistan is a moment for me to thank them and their families for their sacrifice. And their sacrifice will not go in vain, because there will be a free Iraq."

Fox News' Wendell Goler and James Rosen and The Associated Press contributed to this report.