Blair is the first UK leader to address the parliament
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British Prime Minister Tony Blair has defended his Iraq policy in a speech to the Australian Parliament in Canberra.
"If the going gets tough, we tough it out," he said, as he stressed the need for a global alliance to fight terror.
This had to include the US, he said, despite the "madness" of anti-American feelings in Europe, Mr Blair said.
Starting his three-nation tour, he said an "interconnected world" meant it was vital to engage in issues like climate change and the Middle East.
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This is not a time to walk away but to have the courage to see it through
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Australian Prime Minister John Howard has come under pressure at home to pull his 900 troops out of Iraq and there are also Australian forces in Afghanistan.
But in his address - the first to the Australian Parliament by a British prime minister - Mr Blair said the situation in Iraq and Afghanistan needed "toughing out" but this was no time for hesitation.
"This is not a time to walk away but to have the courage to see it through," he said.
He denied democracy had been foisted on Islamic countries but said the way the people had embraced the elections was a symbol of hope and an endorsement for these values.
These are not western ethics but universal ones which should be the right of the "global citizen", said Mr Blair.
'Difficult friends'
He added: "If we want to secure our way of life, there's no alternative but to fight for it. That means standing up for our values not just in our own country but the world over.
"We need to construct a global alliance for these global values and act through it."
Mr Blair is not universally popular in Australia
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Mr Blair, who began his speech by talking about his time in Adelaide as a child, said this alliance required the US and he described anti-Americanism as "madness".
"I don't always agree with the US. Sometimes they are difficult friends to have."
"But the strain of, frankly, anti-American feeling in parts of European politics is madness when set against the long-term interests of the world we believe in."
No longer could the world's major problems be addressed without co-operation between nations and Mr Blair thanked Australia for its past support.
He said: "This is the age of the interconnected - we all recognise this when it comes to economics, communication and culture, but the same applies to politics.
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People kept asking me the question so I decided to answer it
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"The struggle in our world today therefore, is not just about security it is a struggle about values and about modernity, whether to be at ease with it or enraged."
Earlier in an interview on Australian radio the prime minister appeared to acknowledge it was a mistake to announce he would not be serving a fourth term.
Before addressing the parliament, Mr Blair was welcomed to the Australian capital with a 19-gun salute and inspected a guard of honour outside the legislature.
He and wife Cherie were expected to join Prime Minister John Howard at the Tomb of the Unknown Australian Soldier before visiting an exhibition marking Australian contribution to the world wars.
New Zealand and Indonesia are next on the Blairs' seven-day tour of Asia and the Pacific.