President Bush paused on Veterans Day (search) to honor American soldiers who have died in Iraq and Afghanistan during his presidency and in wars past. As he spoke, U.S. warplanes and artillery pounded insurgents west of Baghdad.

"Some of tomorrow's veterans are in combat now in Iraq," Bush said Thursday at Arlington National Cemetery, where he laid a wreath on the Tomb of the Unknowns (search). "They have a clear mission to defeat the terrorists and aid the rise of a new government that can defend itself. They are making us proud. ... They are winning."

About 142,000 U.S. troops are in Iraq, up several thousand from a few weeks ago. As the Iraq war nears the two-year mark, the U.S. death toll stands at more than 1,140.

Bush made his remarks as U.S. soldiers and Marines opened a second phase in an offensive against insurgents in the southern half of Fallujah (search). The military, which is trying to squeeze Sunni Muslim fighters into a smaller cordon of the city, estimated that 600 insurgents have been killed in the assault thus far, yet acknowledged success in the city won't break Iraq's insurgency.

The huge Fallujah campaign also has sent a stream of American wounded to the military's main hospital in Europe. Planes carrying around 90 bloodied and broken troops were expected Thursday at Landstuhl Regional Medical Center (search) in Germany. They join 125 wounded soldiers flown there already this week.

Bush also honored the 25 million living U.S. veterans. "Our nation thanks them all," he said in a somber address.

He said that because Americans are willing to serve in uniform and sometimes sacrifice their lives, America is the "greatest force for good" among all nations of the world."