President George W. Bus said Thursday he would work with allies to beef up sanctions on Iran after a new UN report showing that Tehran is accelerating its uranium enrichment program in defiance of international demands. "We need to strengthen our sanctions regime," Bush said in a Rose Garden news conference. Leaders of Iran "continue to be defiant as to the demands of the free world," he said. The president said he had directed Secretary of State Condoleezza Rice to work with European partners to "develop further sanctions." Bush's comments on Iran came against a backdrop of rising tensions. The UN's nuclear watchdog agency on Wednesday accused Iran of accelerating its uranium enrichment program in defiance of international demands. The US has moved two aircraft carriers and seven other ships into the Persian Gulf in a show of force. And Iran has been increasing its detention of American citizens. "The world has spoken and has said no nuclear weapons programs. Yet they're constantly ignoring the demands," Bush said. The rhetoric on Iran increased ahead of a meeting in Baghdad on Monday between US and Iranian diplomats - one of the few such meetings since formal relations were frozen in 1980 - to deal with stabilizing Iraq. Bush also hailed the recently negotiated compromise with the Democratic-run Congress that will pay for the war in Iraq through September without strings attached. The bill, being voted on in both the House and Senate on Thursday, "reflects a consensus that the Iraqi government needs to show real progress in return for America's continued support and sacrifice," Bush said. He noted that the legislation contained various goals for Iraqi progress and said "meeting these benchmarks will be difficult; it's going to be hard for this young government." Bush said the measure would help to put pressure on the Iraqi government to perform better. The legislation would help to pay for the president's recent troop buildup designed to secure Baghdad and other volatile areas. "This summer is going to be a critical time for the new strategy," Bush said. He said the last five brigades - about 15,000 troops - of his buildup are scheduled to arrive in Baghdad next month. "We are going to expect heavy fighting in the next weeks and months and we can expect American and Iraqi casualties," Bush said. "We will stay on the offense," he added, repeating a favorite refrain: "It's better to fight them there than to fight them here." The president also said that the strategy he is now following includes many of the recommendations issued last December by the bipartisan Iraq Study Group headed by former Secretary of State James A. Baker III and former Rep. Lee Hamilton - recommendations at first generally ignored by the administration. Meanwhile, Bush plugged the immigration proposal that his administration negotiated with Senate leaders of both parties. The legislation faces an uncertain fate in the Senate, let alone the House. "It's a difficult piece of legislation and those who are looking to find fault with this bill will always be able to find something. But if you're serious about securing our borders, and bringing millions of illegal immigrants in this country out of the shadows, this bipartisan bill is the best opportunity to move forward," he said. Still, Republicans and Democrats placed strict new conditions on the immigration measure on Wednesday, voting overwhelmingly to slash the number of foreign workers who could come to the US on temporary visas, capping the guest-worker program at 200,000 a year.