U.S. Defence Secretary Donald Rumsfeld, who has overseen the execution of the unpopular war in Iraq, is stepping down in the wake of major Democratic gains in the mid-term elections.

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U.S. President George W. Bush announced Donald Rumsfeld's resignation, saying they had agreed Tuesday that the resignation was 'appropriate.' ((CBC) )

President George W. Bush made the announcement early Wednesday afternoon, as Democrats emerged from the previous day's ballots with a solid majority in the U.S. House of Representatives and a narrow lead in the final undecided race they must win to control the Senate.

Bush described Rumsfeld, who had held the post for six years, as "a patriot who served this country with honour and distinction," but said the pair had agreed Tuesday that the resignation was "appropriate."

"Now after a series of thoughtful conversations, we've agreed that the timing is right for new leadership at the Pentagon," the president told a news conference in Washington.

"I recognize that many Americans voted last night to register their displeasure with the lack of progress being made" in Iraq, the president said.

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Donald Rumsfeld testifies in June 2006 about the U.S. military strategy in Iraq before a Senate committee. At the time, he said it 'would be a mistake' to set a timetable for troop withdrawal. ((Dennis Cook/Associated Press) )

"[Rumsfeld] understands Iraq is not working well enough, fast enough."

Robert Gates, who was director of the CIA from 1991 to 1993 and is the president of Texas A&M University,was nominated to succeed Rumsfeld.

Bush, Gates and Rumsfeld appeared at a mid-afternoon news conference, during which Rumsfeld described the war in Iraq as "little understood."

"It's been quite a time," said Rumsfeld. "It recalls to mind the statement by Winston Churchill, something to the effect that: I have benefited greatly from criticism, and at no time have I suffered a lack thereof."

Gates said he hadn't foreseen a return to federal government, but that the situations in Iraq and Afghanistan were too important not toaccept the offer.

"I believe the outcome of these conflicts will shape our world for decades to come," Gates said.

Earlier, Bush was asked why he told reporters in the Oval Office a week earlier that Rumsfeld was going to stay on.

He said he gave them that answer because he "didn't want to inject a major decision on the war into the final days of a campaign" and because he hadn't yet spoken with Gates.

When pressed on whether he knew then that Rumsfeld would be leaving, he replied that he had not made a final decision. Bush said the final decision was made on Tuesday.

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Robert Gates, shown in 2003, was director of the CIA from 1991 to 1993 under the presidency of George H. W. Bush. ((Harry Cabluck/Associated Press))

Earlier on Wednesday, a spokesman for Rumsfeld said he had given no indication that he would step down in the wake of Democratic gains in Tuesday's election.

Senior Democrats and a number of retired generals have previously called for Rumsfeld's resignation over his handling of the war.

In February 2005 Rumsfeld said he twice submitted his resignation to Bush during the Abu Ghraib prison abuse scandal,butthe president refused to accept it.

Earlier this week, an editorial titled "Time for Rumsfeld to Go," was published in the editions of the Army Times, Air Force Times, Marine Times and the Navy Times.