In rare, impromptu public remarks, he said the US government had thoroughly reviewed the deal and declared: "If there was any chance that this transaction would jeopardize the security of the United States, it would not go forward."
Some leading US lawmakers have said they will draft legislation delaying the agreement, citing security concerns and what they charge is the UAE's spotty record on battling terrorism.
"I can understand why some in Congress have raised questions about whether or not our country will be less secure as a result of this transaction. But they need to know that our government has looked at this issue and looked at it carefully," Mr Bush told reporters.
"It would send a terrible signal to friends and allies not to let this transaction go through," the president said of the agreement involving the United Arab Emirates state-owned ports operator Dubai Ports World.
Unless US lawmakers prevent it, Dubai Ports World's controversial acquisition of the British firm which currently manages the ports is to be finalized on March 2.
"The company has been cooperative with the United States government. The company will not manage port security. The security of our ports will be continued to be managed by the coast guard and the customs," said Mr Bush.
"The company is from a country that has been cooperative in the war on terror, been an ally on the war on terror," said the US president.
Lawmakers oppose deal
The president made his veto threat after top US politicians said they would draft legislation to prevent the deal from going ahead until a thorough vetting process had been completed.
They also asked the president to block the deal, citing security concerns.
"Our plea to the president would be, put this contract on hold right now. Do not let it go forward," Democratic US Senator Chuck
Schumer said.
Senator Schumer, along with his fellow New Yorker lawmaker, US Representative Peter King, called on Mr Bush to revoke the deal approved by the Treasury Department's Committee on Foreign Investment in the United States, or CFIUS.
Unless US politicians prevent it, Dubai Ports World's controversial acquisition of the British firm which currently manages the ports is to be finalised on March 2.
The two New York politicians said they have prepared legislation that, if passed by Congress, would freeze the CFIUS deal.
Senate Majority Leader Bill Frist issued a similar call to delay the deal, which he said raises "serious questions regarding the safety and security of our homeland."
Anger mounted in the United States over the deal, with politicians calling to cancel it and a US company filing suit to block it.
The port of Miami, one of America's busiest, is the focal point for the bustling US cruise and vacation industry. Other ports affected in the deal are in New York; New Jersey; Baltimore, Maryland; New Orleans, Louisiana; and Philadelphia, Pennsylvania.