US President George W. Bush (R) and Germany's Chancellor Angela Merkel walk through the gardens before their bilateral meeting at Schloss Meseberg, Germany June 11, 2008. (Xinhua/Reuters Photo) 

On Iraq, Bush said he has no regrets about the decision to invade the country in 2003, but he did regret the rhetoric he had used prior to the war which had made it appear that he was eager to go to war.

"I don't regret it at all," Bush said. But he admitted that he could have used "better rhetoric" to make his case for the Iraq war.

He said "substantial progress" had been made in Iraq and it would "change the Middle East for the better."

Bush also voiced optimism about reaching a security agreement with Iraq, adding that this will not involve permanent US bases in Iraq nor will it bind any future US president to certain troop levels.

The agreement, known as a Status of Forces Agreement (Sofa) proposed by the United States, has met strong opposition from many Iraqi politicians with critics complaining that the agreement would turn Iraq into a virtual colony and allow the United States to maintain nearly 60 bases in their country indefinitely.

On climate change, which is high on Merkel's foreign policy agenda, Bush said that the United States is working closely with other major economies to develop a common goal.

"The objective is to be able to announce a long-term, binding goal at the G-8," Bush said, referring to next month's summit of the Group of Eight major industrialized nations in Japan.

The two leaders also agreed on the need to push forward the stalled Doha Round of multilateral trade talks.

Noting that soaring food prices are becoming a crucial issue for developing countries, Merkel said "this trade round is absolutely essential for a balanced situation in the world-at-large."

Bush departed for Rome on Wednesday afternoon to continue his farewell European trip, which will also take him to Paris, London and Belfast.

(Xinhua News Agency June 12, 2008)