Our men and women in uniform are making sacrifices and showing a sense of duty stronger than all fear. They know what it's like to fight house to house in a maze of streets, to wear heavy gear in the desert heat, to see a comrade killed by a roadside bomb. And those who know the costs also know the stakes.

Marine Staff Sgt. Dan Clay was killed last month fighting in Fallujah. He left behind a letter to his family, but his words could just as well be addressed to every American. Here's what Dan wrote: “I know what honor is. It has been an honor to protect and serve all of you. I faced death with the secure knowledge that you would not have to. Never falter. Don't hesitate to honor and support those of us who had the honor of protecting that which is worth protecting.”

Staff Sgt. Dan Clay's wife, Lisa, and his mom and dad, Sara Jo and Bud, are with us this evening. Welcome. Our nation is grateful to the fallen, who live in the memory of our country. We're grateful to all who volunteer to wear our nation's uniform, and as we honor our brave troops, let us never forget the sacrifices of America's military families.

Our offensive against terror involves more than military action. Ultimately, the only way to defeat the terrorists is to defeat their dark vision of hatred and fear by offering the hopeful alternative of political freedom and peaceful change. So the United States of America supports democratic reform across the broader Middle East.

Elections are vital, but they are only the beginning. Raising up a democracy requires the rule of law, protection of minorities and strong, accountable institutions that last longer than a single vote. The great people of Egypt have voted in a multiparty presidential election, and now their government should open paths of peaceful opposition that will reduce the appeal of radicalism.

The Palestinian people have voted in elections, and now the leaders of Hamas must recognize Israel, disarm, reject terrorism and work for lasting peace. Saudi Arabia has taken the first steps of reform. Now it can offer its people a better future by pressing forward with those efforts. Democracies in the Middle East will not look like our own, because they will reflect the traditions of their own citizens. Yet liberty is the future of every nation in the Middle East, because liberty is the right and hope of all humanity.

The same is true of Iran, a nation now held hostage by a small clerical elite that is isolating and repressing its people. The regime in that country sponsors terrorists in the Palestinian territories and in Lebanon, and that must come to an end. 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. America will continue to rally the world to confront these threats.

Tonight, let me speak directly to the citizens of Iran. 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.

To overcome dangers in our world, we must also take the offensive by encouraging economic progress and fighting disease and spreading hope in hopeless lands. Isolationism would not only tie our hands in fighting enemies, it would keep us from helping our friends in desperate need. We show compassion abroad, because Americans believe in the God-given dignity and worth of a villager with H.I.V./AIDS or an infant with malaria or a refugee fleeing genocide or a young girl sold into slavery. We also show compassion abroad because regions overwhelmed by poverty, corruption and despair are sources of terrorism and organized crime and human trafficking and the drug trade.

In recent years, you and I have taken unprecedented action to fight AIDS and malaria, expand the education of girls and reward developing nations that are moving forward with economic and political reform. For people everywhere, the United States is a partner for a better life. Shortchanging these efforts would increase the suffering and chaos of our world, undercut our long-term security and dull the conscience of our country. I urge members of Congress to serve the interests of America by showing the compassion of America.

Our country must also remain on the offensive against terrorism here at home. The enemy has not lost the desire or capability to attack us. Fortunately, this nation has superb professionals in law enforcement, intelligence, the military and homeland security. These men and women are dedicating their lives to protecting us all, and they deserve our support and our thanks. They also deserve the same tools they already use to fight drug trafficking and organized crime. So I ask you to reauthorize the Patriot Act.

It is said that prior to the attacks of Sept. 11 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 Qaeda 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 Qaeda 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 Qaeda, we want to know about it, because we will not sit back and wait to be hit again.

In all these areas, from the disruption of terror networks to victory in Iraq to the spread of freedom and hope in troubled regions, we need the support of our friends and allies. To draw that support, we must always be clear in our principles and willing to act. The only alternative to American leadership is a dramatically more dangerous and anxious world. Yet we also choose to lead, because it is a privilege to serve the values that gave us birth. American leaders from Roosevelt to Truman to Kennedy to Reagan rejected isolation and retreat, because they knew that America is always more secure when freedom is on the march. Our own generation is in a long war against a determined enemy, a war that will be fought by presidents of both parties, who will need steady bipartisan support from the Congress. And tonight I ask for yours. Together, let us protect our country, support the men and women who defend us and lead this world toward freedom.

Here at home, America also has a great opportunity. We will build the prosperity of our country by strengthening our economic leadership in the world.

Our economy is healthy and vigorous, and growing faster than other major industrialized nations. In the last two and a half years, America has created 4.6 million new jobs, more than Japan and the European Union combined. Even in the face of higher energy prices and natural disasters, the American people have turned in an economic performance that is the envy of the world.

The American economy is pre-eminent, but we cannot afford to be complacent. In a dynamic world economy, we are seeing new competitors like China and India. And this creates uncertainty, which makes it easier to feed people's fears. So we're seeing some old temptations return. Protectionists want to escape competition, pretending that we can keep our high standard of living while walling off our economy. Others say that the government needs to take a larger role in directing the economy, centralizing more power in Washington and increasing taxes. We hear claims that immigrants are somehow bad for the economy, even though this economy could not function without them. All these are forms of economic retreat, and they lead in the same direction, toward a stagnant and second-rate economy.