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President Bush defiantly insisted yesterday that America would still achieve “victory” in the Iraq war as he distanced himself from this week’s report of the Baker-Hamilton commission.

Speaking alongside Tony Blair at a Washington press conference, Mr Bush ruled out direct engagement with Iran — a key recommendation of the Iraq Study Group’s report — until the Tehran regime had halted its uranium enrichment programme. He also emphasised that he was waiting for other reviews, including one he has commissioned from the Pentagon, before deciding on a fresh approach on Iraq and the Middle East.

Asked if he was still in denial about the way the war was going, Mr Bush snapped back, saying: “It’s bad in Iraq — does that help?”. Although he acknowledged that “the American people expect us to come up with a new strategy”, much of his language echoed that of the past four years as he talked about the “noble goal” of spreading democracy to the Middle East.

He predicted that the US would ultimately prevail, saying: “We will defeat the extremists and the radicals. We will help a young democracy prevail in Iraq, and in doing so, we will secure freedom and peace for millions, including our own citizens.”

For his part, the Prime Minister sought to bridge the gap between such idealism and the hard-headed “realists” of the Iraq Study Group, led by James Baker, the former Secretary of State, and the veteran Democrat Lee Hamilton.

Their report on Wednesday said that the situation in Iraq was “grave and deteriorating” as it called for a new foreign policy to halt a “slide towards chaos”. Mr Blair said: “I think the analysis of the situation is not really in dispute . . . The report is practical, it’s clear, and it offers also the way of bringing people together. This report gives us a basis on which we can move forward.

“There’s a tendency, I think, sometimes, to see this as a battle between the idealists on the one hand and the realists on the other. In my view the only modern form of realism is one that has ideals at the centre of it.”

The Prime Minister confirmed that he would be heading to the Middle East himself before the end of the year to hold talks about the stalled Israeli-Palestinian peace process. Both Mr Blair and the Baker-Hamilton report have identified this as the key to a broader settlement for the entire region, including Iraq.

The British Government is known to have been frustrated by the lack of a sustained effort from the US on the peace process. Mr Bush accepted yesterday that “progress has been spotty”, before blaming that on extremists who have sought to stifle democracy across the Middle East. But Mr Blair said: “There would be no point in me going, unless it was part of a mission that was supported fully by our American allies. What you have from us today is an acceptance and indeed a clear belief that you look at these issues together.”

Differences remain, however, between the British and American positions. Mr Bush made it clear that he would not accept negotiations that deviated from the existing “Quartet principles” which insist that a future Palestinian government must be committed to non- violence, recognise the state of Israel and accept all previous obligations.

Mr Blair told the same press conference that while Israel’s right to exist was non-negotiable, it might be necessary to find “a different way forward” that bypassed the Quartet principles.

His official spokesman explained later that while Mahmoud Abbas, the Palestinian President, accepted the principles, Hamas — the largest party in authority — did not. “We have to find a way of resolving that either through a unity government or another way,” the spokesman said.

There were similar disagreements on the Baker report’s call for direct engagement with Iran and Syria on the future of Iraq, with Mr Bush saying that if Syria and Iran were not committed to helping, “then they shouldn’t bother to show up” for any talks. Specifically on Iran, the President reiterated that he would not enter direct negotiations until it had suspended its enrichment programme, despite the Baker report’s suggestion that the nuclear issue be kept separate.

Significantly, Mr Blair ducked the nuclear question. But he did say that Syria and Iran needed to show that they were willing to end their support for sectarian violence and sponsorship of terrorism.

Mr Bush said that the Baker-Hamilton report was “very constructive” and would certainly not “just gather dust”. A key proposal for gradually withdrawing US combat troops from the front line appeared to get some presidential backing as he suggested that the military would focus more on chasing down al-Qaeda when the Iraqis were able to deal with sectarian violence. But he added: “I don’t think Jim Baker and Lee Hamilton expect us to accept every recommendation.”

Changing tack

Bush on the Baker Report and Iraq

“I don’t think Jim Baker and Lee Hamilton expect us to accept every recommendation . . . We will defeat the extremists and the radicals. We will help a young democracy prevail in Iraq”

Blair on Baker and Iraq

“I think the analysis of the situation is not really in dispute. The question is how do we find the right way forward”

Bush on Iran

“If they would like to engage the United States, they’ve got to verifiably suspend their enrichment programme. We’ve made our choice. Iran now has an opportunity to make its choice”

Blair on Iran and Syria

“The issue for me is not a question of being unwilling to sit down with people or not, but the basis upon which we discuss on Iraq has got to be clear . . . you support the democratic elected government, you do not support sectarians, and you do not support, arm, or finance terrorists”

Bush on the Middle East peace process

“We can’t abandon the principles of the Quartet because it may sound easy. You know, we can’t do that. When nations lay out principles, you’ve got to adhere to those principles. It’s like when we laid out a vision, you adhere to that vision

Blair on the Middle East peace process

“What we have got to do is to find either a way of unlocking the problem of forming that national unity government on the principles laid down by the United Nations as well as the rest of the Quartet and alternatively a different way forward”

Talking to both sides

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