Speaking to the Daily Telegraph and other news media before his visit to Europe next week, Bush rejected Chancellor Gerhard Schroeder's belief that NATO is no longer at the heart of the transatlantic alliance.

"I disagree. I think NATO is vital," said the president, who will attend separate summits in Brussels with NATO and EU leaders on Tuesday.

"NATO is a very important relationship as far as the United States is concerned. It is one that has worked in the past and will work in the future, so long as there is that strong commitment to NATO."

Schroeder set out his views in a speech last weekend at the Munich security conference that was read on his behalf by Defence Minister Peter Struck due to illness.

He urged the European Union and the United States to set up a panel of independent senior officials that would report back by the beginning of 2006 on new ways to boost transatlantic ties.

Bush said he was looking forward to seeing Schroeder in the German city of Mainz next week to determine "exactly what he meant".

"Some have said we must have a unified Europe to balance America," Bush added. "Why, when in fact we share values and goals? As opposed to counter-balancing each other, why don't we view this as a moment when we can move in a concerted fashion to achieve those goals?"

The president also said: "My trip to Europe is to seize the moment and invigorate (the) relationship. We compete at times, but we do not compete when it comes to values."

The Daily Telegraph, which has a strong euroskeptic editorial policy, noted that Bush had "remarkably warm words" about EU integration.

"I have always been fascinated to see how the British culture and the French culture and the sovereignty of nations can be integrated into a larger whole in the modern era," he said.

"Progress is being made and I am hopeful it works because one should not fear a strong partner.