In his annual state of the union address, U.S. President George W. Bush again defended his plan to send more troops to Iraq, but also focused on domestic issues facing Americans including affordable health insurance and the need to cut gasoline consumption.

Bush began his address Tuesday night by outlining three economic priorities: balancing the budget within the next five years, cutting the number of earmarks — special interest items slipped into bills — and fixing Medicare and Medicaid while saving social security.

"Somehow we have not found it in ourselves to act," he said. "So let us work together and do it now."

To provide affordable health care,  Bush proposed a tax deduction for families with health insurance. He also said the federal government should help subsidize states that provide basic coverage.

Bush also focused on U.S. energy consumption, saying it was in Americans' "vital interest to diversify America's energy supply, and the way forward is through technology.

He called on Americans to reduce gasoline usage in the United States by 20 per cent in the next 10 years. Bush said such a reduction would cut total imports by the equivalent of three-quarters the oil that the United States currently imports from the Middle East.

Bush said to reach that goal, the U.S. must increase the supply of alternative fuels by setting a mandatory fuels standard to require 35 billion gallons (132 billion litres) of renewable and alternative fuels in 2017.

"America is on the verge of technological breakthroughs that will enable us to live our lives less dependent on oil," he said.

"These technologies will help us become better stewards of the environment — and they will help us to confront the serious challenge of global climate change."

The president also addressed Iraq and his new strategy to send about 21,500 additional troops to Iraq in an effort to curb the escalating violence.

"I have spoken with many of you in person. I respect you and the arguments you made," Bush said. "We went into this largely united, in our assumptions and in our convictions. And whatever you voted for, you did not vote for failure.

"Our country is pursuing a new strategy in Iraq and I ask you to give it a chance to work," Bush said. "And I ask you to support our troops in the field and those on their way."

Bush said he had reviewed the decision with military commanders and had considered every possible approach.

"In the end I chose this course of action because it provides the best chance of success," Bush said. "Many in this chamber understand that America must not fail in Iraq — because you understand that the consequences of failure would be grievous and far reaching."

"On this day, at this hour, it is still within our power to shape the outcome of this battle," the president said. "So let us find our resolve and turn events toward victory."

Public support for the war is at a record low, according to polls, and a vast majority of Americans oppose his decision to send additional troops.

Bush said that the war on terror "is a generational struggle that will continue long after you and I have turned our duties over to others. That is why it is important to work together so our nation can see this great effort through."

With files from the Associated Press