This was the speech Tony Blair has been wanting to make for months.
By Nick Assinder
BBC News Online political correspondent
Its central purpose was to finally draw a line under the Iraq crisis and re-focus the eyes of both his party and the voters back onto the domestic agenda.
Blair hopes to highlight the domestic agenda
And, despite the horror of the Madrid atrocity, the prime minister concentrated on doing just that.
He did devote the opening section of his address to warning people once again that they should not underestimate the threat posed by global terrorism, likening it to Nazism and the Cold War.
But he quickly moved on to the core of his address and it was hard not to see this as the speech which also fired the starting pistol on the next general election campaign.
His rallying call to his troops and his comprehensive assault on the Tories have boosted speculation that that poll will indeed now come some time next summer.
It certainly had all the hallmarks of a pre-election speech.
It was peppered with talk of the prime minister's vision, it attempted to remind people why they voted New Labour in the first place seven years ago, and it promised a third term Blair government would press ahead with radical reforms to put Britain in the lead in the world.
Unlike some of his recent speeches on domestic issues, it was also more conciliatory towards his own party.
There was none of the old talk about wreckers or the forces of conservatism trying to destroy his programme of reform.
This speech was all about the successes he, the party and the government had already achieved.
It was all about "us" and "we" rather than the "me" and "you" which have often been the hallmarks of his previous speeches.
The prime minister also signalled a significant change of tack, away from reassurances that if people just held on a little longer they would soon start to feel the benefits of his massive investment programme.
This time it was all about how that delivery was well under way. Things really had got better.
Individuals were already experiencing the benefits of better health and education provision - and there would be more to come, he said.
New Tory threat
What worries the government is the suggestion that, despite their personal experiences, voters still do not believe the improvements are widespread.
Mr Blair's job is to persuade them that really is the case and that the Tories would wreck it all by returning to the bad old days of Thatcherism.
His attack on the opposition also had a new tone. It implicitly acknowledged that the Tory party under Michael Howard is a real electoral threat.
That can only do the prime minister good with his own troops and he is obviously eager to persuade his party and supporters that they now face a stark choice between New Labour or a revitalised Thatcherite Tory party.
This was also a speech which betrayed no sign whatsoever that the prime minister may be preparing to stand down before the next general election.
This was the speech of a leader apparently determined to lead his party into that poll and win it.
The prime minister will now be hoping that this speech will achieve what he has patently failed to pull off over the past few weeks, by finally putting the war behind him.
Even as he spoke an anti-war demonstration was getting under way in Manchester.
And, as past events have shown, this is an issue that keeps coming back to blow his domestic agenda off course.
The Madrid bombings may have helped him to the extent that they appear to support his warnings about the threats posed by terrorism.
Others, of course, will argue that his actions in Iraq have made such attacks more, rather than less, likely.
Tony Blair knows those arguments will not evaporate.
He simply hopes he can drive them down the political agenda and get his domestic, pre-election strategy back on track.