Saturday, February 25 2006 10:17 Hrs (IST) - World Time -

Washington: US President George W Bush said that Iraq faced 'a moment of choosing' between sectarian violence and democracy but downplayed fears of civil war spurred by the bombing of a Shiite shrine.

Bush led a chorus of US officials urging Iraqi leaders to build a unity government that does not marginalise minority Sunni Muslims.

"We can expect the coming days will be intense. Iraq remains a serious situation. But I'm optimistic," because of elections that show Iraqis want to build a democracy where Saddam Hussein's regime once stood, Bush said yesterday (Feb 24,2006).

His comments came in a speech in which he defended his strategy in Iraq and accused Iran of being 'the world's premier state sponsor of terror,' as he reiterated that Tehran must not get nuclear weapons.

The president also stood firm in his demands that Hamas disarm and recognise Israel but suggested for the first time that the business of governing the Palestinians might have 'a moderating influence' on the radical group.

Bush stepped up appeals for Iraqis to form a unity Government while acknowledging that haggling over its composition was 'difficult and exhausting.'

"This is a moment of choosing for the Iraqi people." Bush also targetted Iran, calling it 'a nation held hostage by a small clerical elite that is isolating and repressing its people and denying them basic liberties and human rights' and saying Tehran "Is defying the world with its ambitions for nuclear weapons."

"A non-transparent society that is the world's premier state sponsor of terror cannot be allowed to possess the world's most dangerous weapons," said the President.