Mr Blair said the UK will help pay for rebuilding the shrine
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Tony Blair has called the attack on one of Iraq's major Shia Muslim shrines an act of "desperation and desecration".
Speaking at his monthly press briefing, Mr Blair said terrorists were intent on preventing democracy in Iraq.
More than 100 people have been killed in violent protests in the aftermath of the bomb attack on the al-Askari shrine in Samarra.
Iraq's leaders have warned of the dangers of civil war, which they fear could lead to the country's break-up.
'Extremism'
Sunni Arab politicians have suspended talks aimed at forming a Shia-led coalition government in protest at reprisals against dozens of their mosques.
Mr Blair described the attacks on the al-Askari shrine as "an act of desperation, as well as an act of desecration by the people who committed this outrage".
Speaking to reporters in Downing Street, he said: "The struggle in Iraq today is the same struggle the world over - it's democracy versus extremism and terrorism.
"And the very purpose of those who desecrate the shrine is to stop the will of the Iraqi people, expressed in an election in which over ten million of them voted, for the country to come together in a unity government."
Mr Blair continued: "My response all the way through whenever these difficulties arise is to stand up for democracy, for liberty - whether in Iraq or elsewhere - and to make sure that the terrorists are defeated. And that is what we have got to do."
The prime minister said all the political parties in Iraq were working together to form a unity government.
'Conspiracy theories'
Those behind the shrine attack on it wanted to "prevent the coming together of the parties", Mr Blair said, and the UK's task was to "stand up" for the Iraqi people in the face of such threats.
Mr Blair has said Britain was ready to contribute to the cost of rebuilding the al-Askari mosque.
Asked who he thought was behind the attacks, he said: "Maybe al-Qaeda is the most obvious suspect because they threatened to blow it up before."
But he urged people to wait for the outcome of an investigation and not to listen to "conspiracy theories".