US President George W Bush has told the American people that Iraq is "now the central front" in a global war against terrorism, and called on other countries to contribute to the effort.
Dozens of US soldiers have died in guerrilla-style attacks
In his first national address since declaring in May that America's mission in Iraq had been accomplished, Mr Bush said he would ask Congress for $87bn to continue occupation and reconstruction in Iraq and Afghanistan.
He said the spending was necessary to continue the war on terror in Iraq.
"Enemies of freedom are making a desperate stand there, and there they must be defeated. This will take time, and require sacrifice," Mr Bush said.
"Yet we will do whatever is necessary, we will spend what is necessary, to achieve this essential victory in the war on terror, to promote freedom, and to make our own nation more secure," he said in the televised speech.
Hours after Mr Bush's speech, the UK Government announced it would be sending about 1,200 extra troops to Iraq.
It insisted the move was not "a kneejerk response" to recent attacks on British troops.
On Monday, two American soldiers were wounded when their vehicles came under attack in Baghdad.
It was the first attack in 48 hours on US soldiers who have suffered daily harassment in Iraq.
Congressional leaders were reportedly stunned by the size of Mr Bush's funding request, which was far larger than they had expected, the Washington Post reported.
The $87bn figure would increase America's federal budget deficit by almost 20% for the coming year.
Mr Bush also appealed for international help to resolve Iraq's security problems, saying the United Nations had a "responsibility" to take on an expanded role in the country.
His speech comes just days before the second anniversary of the 11 September attacks on New York and Washington, in the aftermath of which Mr Bush announced the launch of a war on terrorism.
COST OF WAR
US war funds
War-related funds requested from Congress (2002-2003) - $75bn
Funds for Iraq and Afghanistan requested from Congress (2003-2004) - $87bn
Budget allocated in March for 'stabilisation phase' - $12bn
Current cost of post-war occupation - $3.9bn/month
Budget allocated in March for 'reconstruction phase' - $7.2bn
Rebuilding cost (McKinsey estimate, July) - up to $90bn
Iraq's estimated pre-war oil revenues - $15-25bn/year
Iraq's estimated debt - $60 - 130bn
US budget deficit
Estimated 2002-2003 - $401bn
Estimated 2003-2004 - $480bn
Ruling out any premature withdrawal from Iraq, Mr Bush warned that the Middle East could "either become a place of progress and peace, or it will be an exporter of violence and terror that takes more lives in America and in other free nations".
The BBC's Ian Pannell in Washington says that the speech was a political gamble for Mr Bush, who is facing accusations that he failed to devise or explain a workable post-war plan for Iraq.
Democrats hoping to challenge Mr Bush for the White House next year were quick to attack the address.
"Let's be clear - a 15-minute speech does not make up for 15 months of misleading the American people on why we should go to war against Iraq or 15 weeks of mismanaging the reconstruction effort since we have been there," presidential hopeful Howard Dean said.
Washington has presented a draft resolution to the UN Security Council under which it hopes to secure a multinational force for Iraq and boost UN involvement in the country's political future.
But the draft resolution has already been criticised by France, Germany and Russia. These countries, which opposed the US-led invasion of Iraq, complain it does not give the UN or the Iraqi people enough power.
The speech comes as Americans prepare to remember the anniversary of 11 September
In the latest effort to control instability in Iraq, US forces in the central city of Najaf say Shia Muslim militias there must lay down their weapons or face being disarmed, by force if necessary.
The militias have seized control of the city in the wake of last month's massive car bombing which killed leading Shia cleric Mohammed Baqer al-Hakim and more than 100 others.