WASHINGTON (AP) – President Bush and British Prime Minister Tony Blair acknowledged difficult progress in the Iraq war they launched together in 2003, but both vowed to keep troops there until the fragile new government takes hold. Both admitted making costly mistakes.

“Despite setbacks and missteps, I strongly believe we did and are doing the right thing,” Bush said Thursday evening in a White House news conference with Blair. “Not everything has turned out the way we hoped.”

For his part, Blair said he left a meeting this week with Iraq’s new prime minister “thinking the challenge is still immense, but I also came away thinking more certain than ever that we should rise to it.”

In unusually introspective comments, Bush said he regretted his cowboy rhetoric after the Sept. 11, 2001, attacks such as his “wanted dead or alive” description of Osama bin Laden and his taunting “bring ‘em on” challenge to Iraqi insurgents.

“In certain parts of the world, it was misinterpreted.”

He also cited the mistreatment of Iraqi prisoners at the U.S.-run Abu Ghraib prison near Baghdad. “We’ve been paying for that for a long time,” Bush said.

Blair regretted the way in which Saddam Hussein’s political allies were expelled from the Iraqi military and government soon after the fall of Baghdad. Critics have said the purge left a security vacuum and encouraged former regime loyalists to take up arms against the newly installed government.

Blair also said allies seriously underestimated the strength and determination of the insurgency.

“It should have been very obvious to us” from the beginning, Blair said.

Here for talks with Bush that will spill over to Friday, the British prime minister briefed the president on his discussions in Baghdad on Monday with Iraqi Prime Minister Nouri al-Maliki, who said his forces are capable of taking control of security in all Iraqi provinces within 18 months.

Neither Bush nor Blair would give specifics on when soldiers from their countries can begin to go home.

“We’re going to work with our partners in Iraq, the new government, to determine the way forward,” Bush said. He said the goal remains “an Iraq that can govern itself and sustain itself and defend itself.”

He said one problem was the lack of an Iraqi defense minister, and he urged Maliki to fill the post soon.

Bush declined to discuss news reports that the Pentagon hoped that the U.S. force, now at 131,000 troops, could be reduced to about 100,000 by year’s end.

He called that “speculation in the press” and said he has not discussed specific reductions in troop levels with commanders on the ground. “We’ll keep the force level there necessary to win,” Bush said.

Britain has about 8,000 troops in Iraq. Blair, asked about Maliki’s 18-month target for Iraqi control, said the goal remains that Iraqi security forces could “take control progressively of their own country.”

But for that to happen, Blair said, “the first thing obviously we need is a strong government in Baghdad” prepared to enforce its rule throughout the country.

On another topic high on the agenda, neither Bush nor Blair would reveal their thinking on a possible package of incentives to draw Iran back to negotiations over its suspected nuclear-weapons program.

“Of course, we’ll look at all options. But it’s their choice right now – they’re the ones who walked away from the table,” Bush said. “I think we ought to be continuing to work on ways to make it clear to them that they will be isolated.”

Bush was dismissive of recent back-channel overtures from Tehran, including a letter to him Iran’s hard-line President Mahmoud Ahmadinejad. Bush said he read the letter, and “I thought it was interesting.”

But he added: “He didn’t address the issues of whether or not they’re going to continue to press for a nuclear weapon. That’s the issue at hand.”

In Britain, where Blair’s alliance with Bush has drawn fierce criticism, the news conference aired beginning at half past midnight.

With casualties rising and violence rampant, Iraq weighs heavily on Bush and Blair. Both leaders have plunged in the polls and face growing calls for major troop withdrawals. At least 2,460 members of the U.S. military have died since the beginning of the war. Britain has lost 106 service personnel.

Bush is under additional pressure from fellow Republicans who are nervous about losing control of the House or Senate – or both – in the November elections.

Both leaders were asked about the toll the war has taken on their popularity.

“There is no question the Iraq war has created a sense of consternation here in America,” Bush said, noting daily images on television of innocent people dying.

“It affects the mentality of Americans,” he said. But he said a more important question now is, “Can we win? That’s what they want to know.”

Blair urged both those who agreed with toppling Saddam and those who didn’t to “just take a step back” and look at the larger picture.

“They want us to stay until the job is done,” he said of the new democratically elected Iraqi government.

“Those people fighting us there know what is at stake. The question is, do we?” Blair said.

In a lighter moment, both leaders were asked what they would miss about each other once they are both out of office, with Blair widely expected to step down soon given widespread unhappiness with his government.

“Wait a minute,” quipped Bush. “I’ll miss those red ties, that’s what I’ll miss.” He quickly added: “Don’t count him out. … I want him here so long as I’m the president.” Bush’s term expires in January 2009.

Said Blair: “What more can I say? Probably not wise to say anything more at all.”

Bush has described the formation of Iraq’s new government of Shiites, Sunni Arabs and Kurds as a turning point. But it’s unclear what that means in terms of the need for U.S. troops. Pentagon officials are worried about the reliability of U.S.-trained Iraqi police and their religious and tribal allegiances.

British officials have said most coalition troops could be withdrawn by 2010.