Asked about the view in parts of the Arab world that Hezbollah emerged the victor from its clashes with Israel, Bush replied: "Hezbollah attacked Israel. Hezbollah started the crisis. And Hezbollah suffered a defeat."

In remarks after day-long meetings with his top national security and foreign policy aides, he praised the UN resolution aimed at ending the fighting and declared: "We certainly hope the ceasefire holds."

"America recognizes that civilians in Lebanon and Israel have suffered from the current violence. And we recognize that responsibility for this suffering lies with Hezbollah," said the US president.

"Responsibility for the suffering of the Lebanese people also lies with Hezbollah's state sponsors, Iran and Syria. The regime in Iran provides Hezbollah with financial support, weapons and training," he said.

"Iran has made clear that it seeks the destruction of Israel. We can only imagine how much more dangerous this conflict would be if Iran had the nuclear weapon it seeks," Bush said at the US State Department.

The UN Security Council has given Iran until August 31 to suspend sensitive nuclear activities or face possible sanctions. But major world powers expect Tehran's answer by August 22 to an incentives package for freezing uranium enrichment.

Over the weekend, the council unanimously approved a compromise resolution aimed at ending the fighting between Israel and Hezbollah, which left hundreds dead, and deploying a multinational force to help Lebanon's armed forces take control of southern Lebanon and halt attacks on Israel.

"If I were Hezbollah, I'd be claiming victory too," Bush said dismissively, before pointing to the planned international deployment and saying: "There's going to be a new power in the south of Lebanon."

"How can you claim victory when, at one time, you were a state within a state, safe within southern Lebanon, and now you're going to be replaced by a Lebanese army and an international force?" he asked.

"We're now working with our international partners to turn the words of this resolution into action. We must help people in both Lebanon and Israel return to their homes and begin rebuilding their lives without fear of renewed violence and terror," said the president.

US Vice President Dick Cheney, US Secretary of State Condoleezza Rice, White House national security adviser Stephen Hadley and White House chief of staff Josh Bolten were at his side while he spoke.

Bush, his job approval ratings suffering from the unpopular war in Iraq, accused Iran of sponsoring armed groups in Lebanon and Iraq "in the hope of stopping democracy from taking hold."

He also accused Osama bin Laden's terrorist network and "death squads" of spreading violence in Iraq.

"The message of this administration is clear: America will stay on the offense against Al-Qaeda. Iran must stop its support for terror," he said.

Bush also sought to defuse charges that the United States had delayed diplomatic efforts to end the Lebanon crisis in order to give Israel time to damage Hezbollah.

"We, from the beginning, urged caution on both sides so that innocent life would be protected," he said. "We were working hard on a UN resolution pretty quickly."

"Diplomacy can be a painful process. And it took a while to get the resolution done. But most objective observers would give the United States credit for helping to lead the effort to get a resolution that addressed the root cause of the problem," he said.

"Of course we could have got a resolution right off the bat that didn't address the root cause. Everybody would have felt better for a quick period of time, and then the violence would have erupted again," he said.

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