By Paul Reynolds
World affairs correspondent BBC News website
By heightening the rhetoric over Iran's nuclear programme, President Bush has left open the possibility that the United States might in due course abandon diplomacy and turn to military might.
Iranian and US brinkmanship has left the door open to military conflict
In his speech to the American Legion in Nevada, he said Iran's "active pursuit of technology that could lead to nuclear weapons threatens to put a region already known for instability and violence under the shadow of a nuclear holocaust".
He also said: "We will confront this danger before it is too late."
Mark Fitzpatrick, nuclear analyst at the International Institute for Strategic Studies in London said: "There is a real possibility that President Bush will feel compelled not to allow this problem to pass to his successor.
"The effectiveness and consequences of air strikes would have to be calculated, of course, and they might in the end be felt to be a bad idea, but we should take this seriously.
"Iran is at the moment making a show of co-operating with the International Atomic Energy Agency but is still refusing full co-operation and hopes to spin this out to prevent further sanctions. It has not stopped its nuclear programme."
The United Nations Security Council is demanding Iran suspend enrichment as a prelude to negotiations about the provision of help for a civil nuclear power programme.
It has imposed sanctions on trade in nuclear and missile technology.
Part of Mr Bush's aim in making these threats, of course, is to persuade Iran to back down.
But the Iranian leadership under President Mahmoud Ahmadinejad has constantly said it intends to carry on with the enrichment of uranium, which Iran has now elevated to the status of a national symbol of its independence.
Iran says it does not intend to build a nuclear weapon and is simply exercising its right under the international nuclear treaty to enrich uranium for nuclear power.
The question of increasing the economic sanctions on Iran is currently before the Security Council, but Russia and China are reluctant to see the squeeze tightened.
Discussions resume seriously in September - but if nothing is done, the Bush rhetoric might at some stage turn into reality.
No wonder French President Nicolas Sarkozy, in his first foreign policy speech, called the crisis over Iran "without doubt the gravest which weighs on the international order".
Running parallel to the nuclear problem is the American claim that Iran is helping Shia militias in Iraq.
Mr Bush said he had ordered US commanders to act against these "murderous activities".
As an example of such "activities", he said US troops had seized 240mm rockets given to "extremist groups" by "Iranian agents" that had been manufactured in Iran this year.
Mr Bush's speech has come in advance of the report his administration will be giving to Congress by 15 September on the success or otherwise of the Iraqi surge in US troops launched earlier this year.
The president was upbeat about progress, saying the US now had the "momentum."
Putting some of the blame on Iran makes it easier for him to argue that the US problems in Iraq are partly due to this external factor and therefore do not amount to a justification of a cut and run approach.