United States President George Bush on Tuesday toughened his stand against Iraq.

"The dictator of Iraq [Saddam Hussein] is not disarming; to the contrary he is deceiving," Bush said in his annual State of the Union address delivered to Congress.

"Today the gravest danger in the war on terror... facing America and the world is outlaw regimes that seek nuclear, chemical and biological weapons. These regimes could use such weapons for blackmail, terror and mass murder," he said referring to Iraq, Iran and North Korea, adding he will 'liberate' people under such regimes.

Most of the speech, which also touched on domestic economic policy, was directed against Iraq: "For the safety of our people and for the peace of the world, we will lead a coalition to disarm him," he said.

Expressing the hope that other governments will help in ending the 'terrible threats' to the civilised world, he said the US will provide fresh evidence in the United Nations on February 5 against Iraq.

Baghdad, he said, has still not accounted for up to 25,000 litres of anthrax, 38,000 litres of botulism toxin, 500 tonnes of sarin, mustard gas and VX nerve agent and more than 30,000 munitions capable of delivering chemical weapons.

He said, "A future lived at the mercy of terrible threats is no peace at all. America will not accept a serious and mounting threat to our country, friends and our allies."

He said the Iranian government represses its people, pursues weapons of mass destruction and supports terror.

"Iranians, like all people, have a right to choose their own government and determine their own destiny, and the US supports their aspirations to live in freedom."

On North Korea, he said, Kim Jong II presides over an 'oppressive regime' over a people 'living in fear and starvation'.

Accusing Pyongyang of using its nuclear programme to incite fear and seek concessions, Bush said the Americans will not be 'blackmailed'.

America is working with countries of the region -- South Korea, Japan, China and Russia -- to find a peaceful solution, and to show the North Korean government that nuclear weapons will bring only isolation, economic stagnation, and continued hardship, he said.

He said the US and the world must learn the lessons of the Korean Peninsula and not allow an even greater threat to rise in Iraq.

Addressing the domestic audience, he said, "After recession, terrorist attacks, corporate scandals and stock market declines our economy is recovering. Yet it is not growing fast enough, or strongly enough.

"Our first goal is clear: We must have an economy that grows fast enough to employ every man and woman who seeks a job."

Bush also proposed to earmark $1.2 billion in research funding to spur development of clean, hydrogen-driven automobiles and to educate children of prison inmates. He also called for a $600 million drug treatment programme in which federal money could go to religious community service programmes.

The president also pledged a $10 billion aid to the Africans suffering from HIV/AIDS and asked the congressmen to pass a law banning all kinds of human cloning.