The question now is how much of the Iraq Study Group's plan President Bush will implement.
By Paul Reynolds
World Affairs correspondent, BBC News website
At a news conference with the British Prime Minister Tony Blair in Washington - the first time Mr Bush had commented in detail on the report - the president said that a "new approach" was needed in Iraq. It is "bad there", he accepted.
But he did not commit himself in advance of three other studies that are coming his way from the Pentagon, the State Department and his National Security Council.
The US president says he wants time to consider all Iraq reports
He did however give some hints, and laid down some parameters. These can be matched against the study group's proposals to see how far he might go.
The study group's main ideas were:
To change the role of US troops from combat to training, thereby enabling a major draw-down by early 2008
To set milestones for the Iraqi government to reach, especially on national reconciliation
To launch a diplomatic initiative in the region in support of Iraq.
The first proposal is not that far out of line with current American thinking, though it goes well beyond the current gradualism of the US policy of handing over to Iraqi troops.
The problem for Mr Bush is that it sets a target date, which is fine for the next American presidential campaign in 2008, but which he has always rejected.
It was perhaps significant that he refused to be drawn on the date in his news conference but stressed instead that conditions on the ground would determine any withdrawal of troops.
And he repeated his battle cry: "Victory in Iraq is important," without actually saying that it was on the way.
The security situation in Iraq continues to deteriorate
So he is likely to accept the broad principle of the study group's plan but not the proposed practice.
Again, the second idea has been explored by the administration and tried to an extent. But what sanctions are available if the government fails to reach the milestones?
The US could hardly withdraw its military support unless open civil war erupted and it had little other choice. Again he avoided laying down rules in his public comments. Encouragement not punishment is the likely course.
As for the third, Mr Bush is hostile to Iran and Syria - and they to the US. While he might try something, it is doubtful if this will lead very far. He said as much, inviting both to join in but only on condition that they act in ways he regards as helpful.
As for the Israel/Palestine issue, it is now clear that Mr Blair has two objects in mind when he goes to the region. Both are aimed at unlocking the door to talks. The first is to get the release of the Israeli soldier held in Gaza and the second is to get a government of national unity among the Palestinians to lead negotiations.
Meanwhile, domestic sceptics are putting pressure on Mr Bush to resist going down the Iraq Study Group's path.
They feel the report had more to do with getting America out of Iraq than getting Iraq out of the war.
The right-wing backlash has already begun.
One of the leaders of the neo-conservative movement, William Kristol, called the report "a disguised surrender".
In an article in his magazine, the Weekly Standard, he said the report's proposal to draw down American combat forces by 2008 was much the same as those laid out previously by the Pentagon.
But he argued that it had not proved possible before and would not necessarily be possible in the future, even under the plan envisaged by the study group.
"The real recommendation of the Baker-Hamilton Iraq Study group is 'stay the course'. For this we waited nine months?" he wrote.
He added about President Bush: "Right now we can only applaud the president's courage and determination and his willingness to resist the pressures of those who would now sound the retreat."
Among the military there are misgivings about setting a target - and about relying on Iraq forces so quickly.
Retired General Barry McCaffrey, who fought during the 1991 Gulf War, said that while the principle of handing over to the Iraqis was correct, those US troops left behind as advisers might find themselves in danger. "They came up with a political thought but then got to tinkering with tactical ideas that in my view don't make any sense. This is a recipe for national humiliation," he said.
And some Iraqis fear that the report does not address Iraqi issues so much as American ones.
"It is a report to solve American problems, not to solve Iraqi problems," a leading Sunni politician was quoted as saying in the Washington Post.