US President George W. Bush holds his dog Barney and salutes while departing Air Force One at TSTC in Waco, Texas before spending a week at his Central Texas ranch in Crawford December 26, 2006. [Reuters]

Crawford - US President George W. Bush said in his New Year's message that the United States would battle terrorists and work towards a "free and unified Iraq" in 2007.

"Defeating terrorists and extremists is the challenge of our time, and we will answer history's call with confidence and fight for liberty without wavering," said Bush.

"Last year, America continued its mission to fight and win the war on terror and promote liberty as an alternative to tyranny and despair," he said in a statement released as he prepared to ring in the new year at his Texas ranch.

"In the New Year, we will remain on the offensive against the enemies of freedom, advance the security of our country, and work toward a free and unified Iraq," said the US president.

The statement came as Bush faced intense pressure to unveil a new strategy in Iraq, where nearly 3,000 US soldiers have died since the March 2003 US-led invasion to topple the late dictator Saddam Hussein.

The latest death came during one of the most violent periods during which the Pentagon says hate and revenge killings between Iraq's sects are now a bigger security problem than ever.

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The death of a Texas soldier, announced Sunday by the Pentagon, raised the number of US military deaths in Iraq to at least 3,000.

Three thousand deaths are tiny compared with casualties in other protracted wars America has fought in the last century. There were 58,000 Americans killed in the Vietnam War, 36,000 in the Korean conflict, 405,000 in World War II and 116,000 in World War I, according to Defense Department figures.

Even so, the steadily mounting toll underscores the relentless violence that the massive US investment in lives and money -- surpassing $350 billion -- has yet to tame, and may in fact still be getting worse.

A Pentagon report on Iraq said in December that the conflict now is more a struggle between Sunni and Shiite armed groups "fighting for religious, political and economic influence," with the insurgency and foreign terrorist campaigns "a backdrop."

From mid-August to mid-November, the weekly average number of attacks in the country increased 22 percent from the previous three months. The worst violence was in Baghdad and in the western province of Anbar, long the focus of activity by Sunni insurgents, said a December report.

Though US-led coalition forces remained the target of the majority of attacks, the overwhelming majority of casualties were suffered by Iraqis, the report said.

The American death toll was at 1,000 in September of 2004 and 2,000 by October 2005.

Bush, who was expected to reveal his plans in a matter of weeks, has been considering a "surge" in US troop levels -- an escalation that would run counter to growing calls for him to bring US forces home.

Bush told an end-of-the-year press conference that the deaths distress him.

"The most painful aspect of the presidency is the fact that I know my decisions have caused young men and women to lose their lives," Bush said.

Asked about the 3,000 figure, deputy White House press secretary Scott Stanzel said Sunday that the president "will ensure their sacrifice was not made in vain."

"We will be fighting violent jihadists for peace and security of the civilized world for years to come. The brave men and women of the US military are fighting extremists in order to stop them from attacking on our soil again," Stanzel said.

In a statement Bush released Sunday to wish the troops and all Americans a happy new year, the president said the nation depends on the men and women in the armed services and are mindful of their dedication and sacrifice.

"Last year, America continued its mission to fight and win the war on terror and promote liberty as an alternative to tyranny and despair," Bush said in the statement released from his ranch in Crawford, Texas, where he and first lady Laura Bush are spending New Year's Eve with friends.

"In the New Year, we will remain on the offensive against the enemies of freedom, advance the security of our country, and work toward a free and unified Iraq," he said. "Defeating terrorists and extremists is the challenge of our time, and we will answer history's call with confidence and fight for liberty without wavering."

In an interview on Dec. 21 with The Associated Press, Secretary of State Condoleezza Rice said the war was "worth the investment" in American lives and dollars.

In his strategy reassessment, Bush has consulted Iraqis, his uniformed and civilian advisers, an outside bipartisan panel that studied the failing war, and other defense and foreign policy experts. New Defense Secretary Robert Gates journeyed to Iraq in his first week on the job in December to confer with American commanders and Iraqi leaders.

Among the president's options was a proposal to quickly add thousands of US troops to the 140,000 already in Iraq to try to control escalating violence in Baghdad and elsewhere.

Others believe too much blood and money already have been sacrificed. Democrats have wanted Bush to move toward a phased drawdown of forces, while the bipartisan Iraq Study Group recommended removing most US combat forces by early 2008 while shifting the US role to advising and supporting Iraqi units.

Having launched the war against the advice of a number of nations, the Bush administration never got a huge international contribution of troops, meaning foreign forces helping the Iraqis are overwhelmingly American.

The death toll shows it. As of late December, the British military has reported 127 deaths in the war so far; Italy, 33; Ukraine, 18; Poland, 18; Bulgaria, 13; Spain, 11; and Denmark, six. Several other countries have had five or less.