Mr Bush struck a realistic tone in a speech and question-and-answer session in Philadelphia, predicting insurgent violence will not end with Thursday's parliamentary elections and saying much work remains to make Iraq's fledging democracy inclusive to all.
He also said about 30,000 civilians, most of them Iraiqs, have been killed since the US-led invasion of Iraq in March 2003, and he denounced the presence of prisons in Iraq "where mostly Sunni men were held, some of whom have appeared to have been beaten and tortured."
"This conduct is unacceptable, and the prime minister and other Iraqi officials have condemned these abuses, and an investigation has been launched and we support these efforts. Those who committed these crimes must be held to account," Mr Bush said.
The Iraqi government said earlier that 13 prisoners found in another prison in Baghdad, in addition to a secret bunker found last month and operated by the Interior Ministry, showed signs of abuse.
A report in the Washington Times cited US and Iraqi officials as saying "an Iraqi official with first hand knowledge of the search said that at least 12 of the 13 prisoners had been subjected to 'severe torture', including sessions of electric shock and episodes that left them with broken bones."
"Two of them showed me their nails, and they were gone," the report quoted the official, whom it said was not named "because of security concerns."
Facing challenges
Mr Bush needs a relatively smooth showing during Thursday's elections in Iraq to hold up as a sign of progress to try to counter daily news of suicide bombings and US troop deaths that have soured the American public on the war.
Mr Bush is fighting to get his second term back on track after a year in which Americans lost faith in his ability to manage the war and a growing number came to believe his administration misled them in making the case for the US-led invasion.
"No nation in history has made the transition to a free society without facing challenges, setbacks and false starts," Mr Bush said.
"It's a remarkable transformation for a country that has virtually no experience with democracy and which is struggling to overcome the legacy of one of the worst tyrannies the world has known," he said.
The speech was Mr Bush's latest attempt to try to bolster support for his Iraq strategy among Americans skeptical of his leadership.
Speaking at an event hosted by the World Affairs Council, a private, non-profit, non-partisan educational organisation, Mr Bush repeated that "we will accept nothing less than complete victory" against what he described as terrorism in Iraq.
His figure for the death toll among Iraqis was in the range given by Iraq Body Count, a US-British non-government group, which currently says between 27,383 and 30,892 civilians, rather than all Iraqi citizens, have been killed in Iraq since the invasion.
Its figures are based on media reports, which often fail to capture all deaths in the country.
Other estimates, including one done by scientists and published in the medical journal Lancet, put the civilian death toll at as high as 100,000.
It was believed to be the first time Mr Bush has publicly estimated the number of Iraqi casualties, a figure that US and military officials have suggested in are not tracked with precision.