"I hereby find that the furnishing of defense articles and services to Iraq will strengthen the security of the United States and promote world peace," Bush said in a memorandum for US Secretary of State Colin Powell.
In Iraq, meanwhile, bomb blasts and gunfire killed at least 12 people and a group calling itself "Black Flags" threatened to behead six new foreign hostages unless their Kuwaiti employer pulls out of the country.
Adding to the unease, Bulgaria and Poland became the latest US allies here to receive threats on an Islamist website telling them to join the exodus, as a former Filipino hostage headed home after Manila pulled its small but symbolic contingent out of Iraq to save his life.
Amid escalating violence just three weeks after the US-led occupation ended, Iraq called on neighboring countries for help, saying it wanted joint security cooperation to protect their common borders.
US officials blame the attacks on insurgents seeking to discredit Iraq's nascent government as it struggles to prepare for general elections by January