President Bush has said that a US-led missile defence system in Europe is urgently needed to counter the emerging threat of attack by Iran.
He said intelligence estimates showed Iran could have the capability to strike the United States and many European allies by 2015.
"If (Iran) chooses to do so, and the international community does not take steps to prevent it, it is possible Iran could have this capability," he said. "And we need to take it seriously now."
Mr Bush's latest warning about Iran's nuclear ambitions came in a broad defence of his security policies at the National Defence University.
"The need for missile defence in Europe is real, and I believe it's urgent," he said.
His warning was contradicted by Russian Foreign Minster Sergey Lavrov who said US-led missile defence initiatives in Europe and Asia were based on a mistaken assessment of the threat posed by Iran.
"North Korea poses a fundamental threat, but Iran does not,"he said.
Mr Bush sought to allay Russia's concerns and draw Moscow in, portraying the proposed system as a "co-operative effort" against "an emerging threat that affects us all."
He spoke positively of President Vladimir Putin's offer of facilities in Azerbaijan and southern Russia. The idea would be to replace the US plans for missiles based in Poland and a radar facility in the Czech Republic.
Mr Bush said the project was "part of a broader effort to move beyond the Cold War" and "could lead to an unprecedented level of strategic cooperation between" Russia and the US
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