1.00pm - By STEPHEN CASTLEIN
ISTANBUL - President George Bush yesterday celebrated the transfer of sovereignty in Iraq with a fresh defence of his "war on terror", a green light to the possible imposition of martial law in Iraq and a scribbled note that read "Let freedom reign".
At a Nato summit in Istanbul dominated by the early transfer of power in Iraq, Bush and British Prime Minister Tony Blair closed ranks in the face of continuing tensions among European leaders over the role of the 26-nation alliance in helping to stabilise the war-torn country.
In the city's streets hundreds of protesters hurled fire-bombs and stones at police, causing dozens of injuries, as the security forces used tear-gas and water cannons to stop them reaching the summit centre.
Because of French objections, the Nato alliance agreed to only the most minor increase in its training of Iraqi security forces.
But the US President shook off the protests, the political tensions and the continuing violence in Iraq, saying the transfer of sovereignty there had been a "proud, moral achievement".
"The Iraqi people have their country back," Mr Bush said.
From the Hilton Hotel inside the security cordon, the President's statements contrasted with more measured words from Blair, who described the transfer of sovereignty as "an important staging post" as "democracy replaces dictatorship".
The White House spokesman, Scott McClellan, said President Bush learned that the handover had been completed from his National Security Adviser, Condoleezza Rice.
Handed the note, which said "Mr President, Iraq is sovereign. Letter was passed from Bremer at 10.26am Iraq time - Condi", Mr Bush passed it back, having scribbled: "Let freedom reign!"
There was then a handshake with Mr Blair.
Later, at a joint press conference with the Prime Minister, the US President made an indirect link between the Iraq conflict and the events of 11 September.
Iraq was, he said, a country where the war of terrorism was being conducted and "where we are finding them instead of waiting for them to strike us at home".
Blair also argued Iraq was "in a genuine sense, the front-line in the battle against terrorism and the new security threats we face".
But there were differences of emphasis as the US President gave his full backing to the Iraqi Government - "as we say in Texas, stand-up guys" - to impose martial law if it wishes.
Bush said: "He may take tough security measures to deal with [Abu Musab al-] Zarqawi, but he may have to. Zarqawi is the guy who beheads people on TV. He's the person that orders suiciders to kill women and children."
He added: "They can't whip our militaries. What they can do is get on your TV screens, stand in front of your TV cameras, and cut somebody's head off in order to try to cause us to cringe and retreat. That's their strongest weapon.
"Prime Minister [Iyad] Allawi has said many times he will not cower in the face of such brutal murder, and neither will we."
Blair avoided such rhetoric, saying that Allawi's use of tough tactics would be to create democracy, rather than to curb freedoms.
More acute tensions surfaced at the Nato summit despite the agreement of the 26 nations to go ahead with the training of Iraqi security forces.
The deal falls well short of US ambitions to see a full Nato peacekeeping role in the country, and even the fudged agreement struck yesterday was being interpreted differently by the protagonists last night.
Blair said the arrangement was "important" and Nato sources said some training would take place in the country, although they concede that the military details have yet to be agreed.
Jacques Chirac, the French President, who has taken the lead in resisting a formal alliance role or the use of Nato flags and insignia, said that the deal allowed for training to take place abroad, unless individual nations wanted to deploy in Iraq.
"Every trace of a role for Nato on Iraqi soil was judged inappropriate," Chirac said, adding, "in my opinion justifiably so."
The alliance's participation could have "negative consequences from a psychological and political point of view".
Meanwhile the alliance gave the green light to an increase in its role in Afghanistan, where it has agreed to extend its presence to five centres beyond Kabul.
The current 6.500 troops will be increased to a potential total of 10,000, although about 2,000 will be on standby rather than being deployed immediately.
That is in marked contrast to the more than 50,000 Nato troops once deployed in Bosnia.
- INDEPENDENT
Herald Feature: Iraq
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Bush celebrates 'freedom' for Iraqis
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