Bush, in excerpts of his State of the Union speech provided by the White House, also urged Tehran to suspend its uranium enrichment program, embrace political reforms, and "cease your support for terror abroad."

"But above all, know this: America will confront those who threaten our troops, we will stand by our allies, and we will defend our vital interests in the Persian Gulf," he said.

His message echoed US warnings about an early January face-off between US and Iranian ships in the Strait of Hormuz and came as Washington pushed for new UN sanctions against Tehran over its disputed nuclear program.

"Our message to the people of Iran is clear: We have no quarrel with you, we respect your traditions and your history, and we look forward to the day when you have your freedom," said Bush.

"Our message to the leaders of Iran is also clear: Verifiably suspend your nuclear enrichment, so negotiations can begin. And to rejoin the community of nations, come clean about your nuclear intentions and past actions, stop your oppression at home, and cease your support for terror abroad," he said.

Bush was to deliver the speech at 9 pm (0200 GMT Tuesday). The White House said it would be his final State of the Union address before leaving office in January 2009.

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