Mr Bush says he has worked hard on his relationship with Mr Maliki
The US has been extensively spying on Iraqi Prime Minister Nouri Maliki, a new book by renowned US reporter Bob Woodward claims.
A source in the book is quoted as saying "we know everything he says", according to the Washington Post.
The book also says "ground-breaking" covert techniques have helped reduce the violence in Iraq.
This is the fourth book on the Bush administration by Mr Woodward, the Washington Post's associate editor.
The War Within: A Secret White House History, 2006-2008, examines the handling of the Iraq and Afghanistan wars and President Bush's leadership and governing style, according to the Post.
Several sources in the book support the claim that Mr Maliki and other Iraqi leaders were being spied on by the US administration.
But Mr Woodward says the tactic was not universally popular in the White House - some senior US officials questioned whether it was worth the risk, given Mr Bush's efforts to develop a close working relationship with Mr Maliki.
The book also claims that the US "surge" in 2007, in which nearly 30,000 extra troops were sent to Iraq, was not the primary reason for the steep drop in violence seen over the last year.
Mr Woodward says new covert techniques have been used successfully by US military and intelligence officials to find, target and kill insurgents.
He does not go into detail about them, saying the White House asked him to withhold specifics in the interests of national security.
The book quotes from interviews given by Mr Bush himself, and looks at the how the decision-making of the war evolved and the internal clashes it caused.
It reveals a breakdown in the confidence between the president and his military commanders in the region, as well as discord between the state and defence departments.
US officials have not commented on the book, which is due to be published on Monday.
Mr Woodward is well-known for his investigative reporting, and first came to prominence for his role in exposing the Watergate scandal which led to President Richard Nixon's resignation in 1974.