The President highlighted our achievements in bringing peace and democracy around the globe, and continued to defend our efforts in Iraq, and warn against defeatism.

There is no peace in retreat. And there is no honor in retreat ... The United States will not retreat from the world, and we will never surrender to evil.

I am confident in our plan for victory … I am confident in the will of the Iraqi people … I am confident in the skill and spirit of our military. Fellow citizens, we are in this fight to win, and we are winning.

...there is a difference between responsible criticism that aims for success, and defeatism that refuses to acknowledge anything but failure. Hindsight alone is not wisdom. And second-guessing is not a strategy."

It was a moving scene when the President mentioned Marine Staff Sergeant Dan Clay, who was killed last month in Fallujah. Sitting with First Lady Laura Bush was Staff Sargeant Clay's widow, and his parents. The applause was deafening.

It was quite striking when the President issued warnings to Hamas, and Iran.

The Palestinian people have voted in elections – now the leaders of Hamas must recognize Israel, disarm, reject terrorism, and work for lasting peace.

...a nation now held hostage by a small clerical elite that is isolating and repressing its people...The Iranian government is defying the world with its nuclear ambitions – and the nations of the world must not permit the Iranian regime to gain nuclear weapons.

The president spoke kindly to the people of Iran, those held hostage by tyranny.

America respects you, and we respect your country. We respect your right to choose your own future and win your own freedom. And our Nation hopes one day to be the closest of friends with a free and democratic Iran.

The president spoke abou the fight against AIDS, urging Congress to show America's compassion.

In a devastating blow to the Democrats, the President called for the reauthorization of the Patriot Act, and defended the terrorist surveillance program.

It is said that prior to the attacks of September 11th, our government failed to connect the dots of the conspiracy. We now know that two of the hijackers in the United States placed telephone calls to al-Qaida operatives overseas. But we did not know about their plans until it was too late. So to prevent another attack – based on authority given to me by the Constitution and by statute – I have authorized a terrorist surveillance program to aggressively pursue the international communications of suspected al-Qaida operatives and affiliates to and from America. Previous presidents have used the same constitutional authority I have – and Federal courts have approved the use of that authority. Appropriate Members of Congress have been kept informed. This terrorist surveillance program has helped prevent terrorist attacks. It remains essential to the security of America. If there are people inside our country who are talking with al-Qaida, we want to know about it – because we will not sit back and wait to be hit again.

We all saw the grand applause from the Republicans, and the dead silence amongst the Democrats.

President Bush praised our healthy, and vigorous, and growing economy, noting that in the past two-and-a-half years, America has created 4.6 million new jobs – more than Japan and the European Union combined. The president urged Congress to make the tax cuts permanent, and to pass the line-item veto.

The Democrats, as rude as they were last year, cheered when President Bush said that Congress failed to save Social Security. Up until that moment, you would have thought the Democrats were asleep. Once they quieted down, Bush tossed the football to the Republicans and said, ""yet the rising cost of entitlements is a problem that is not going away – and with every year we fail to act, the situation gets worse ... We need to put aside partisan politics, work together, and get this problem solved." In addition to improving national health care, President Bush urged the passage of medical liability reform this year.

Speaking on energy, the President declared we are addicted to oil, and announced the Advanced Energy Initiative, which calls for new, cleaner technologies.

By applying the talent and technology of America, this country can dramatically improve our environment … move beyond a petroleum-based economy … and make our dependence on Middle Eastern oil a thing of the past.

The President also announced the American Competitiveness Initiative, which will "encourage innovation throughout our economy, and to give our Nation’s children a firm grounding in math and science." This initiative will double the Federal commitment to the most critical basic research programs in the physical sciences over the next ten years; make the research and development tax credit permanent; and encourage children "to take more math and science, and make sure those courses are rigorous enough to compete with other nations."

The president noted some progresses our country has seen:

In recent years, America has become a more hopeful Nation. Violent crime rates have fallen to their lowest levels since the 1970s. Welfare cases have dropped by more than half over the past decade. Drug use among youth is down 19 percent since 2001. There are fewer abortions in America than at any point in the last three decades, and the number of children born to teenage mothers has been falling for a dozen years in a row.

Moving on to the courts, the President acknowledged his two Supreme Court nominees. "The Supreme Court now has two superb new members, Chief Justice John Roberts and Justice Sam Alito." In a clear attack against lbieral activist judges and the senators who would welcome them, the President said "I will continue to nominate men and women who understand that judges must be servants of the law, and not legislate from the bench." Of course, the President took fair time to honor Sandra Day O'Connor's 24 years of service.

The president included some words on lobbying reform, saying "each of us has made a pledge to be worthy of public responsibility – and that is a pledge we must never forget, never dismiss, and never betray."

Before closing the State of the Union, the President mentioned the efforts to rebuilding New Orleans.

The President closed his 50 minute speech with these remarks:

Fellow citizens, we have been called to leadership in a period of consequence. We have entered a great ideological conflict we did nothing to invite. We see great changes in science and commerce that will influence all our lives. And sometimes it can seem that history is turning in a wide arc, toward an unknown shore.

Yet the destination of history is determined by human action, and every great movement of history comes to a point of choosing. Lincoln could have accepted peace at the cost of disunity and continued slavery. Martin Luther King could have stopped at Birmingham or at Selma, and achieved only half a victory over segregation. The United States could have accepted the permanent division of Europe, and been complicit in the oppression of others. Today, having come far in our own historical journey, we must decide: Will we turn back, or finish well?

Before history is written down in books, it is written in courage. Like Americans before us, we will show that courage and we will finish well. We will lead freedom’s advance. We will compete and excel in the global economy. We will renew the defining moral commitments of this land. And so we move forward – optimistic about our country, faithful to its cause, and confident of victories to come.

Thank you, God bless you, and may God bless America.

Blogs for Bush had live blogging coverage of the State of the Union Address.