WASHINGTON -- President George W. Bush embraced compromise versions of two key pieces of congressional legislation Thursday, one on the war in Iraq and one on immigration.

Video: Iran Remains Defiant

The president made his remarks during a wide-ranging news conference in which he also said, "We need to strengthen our sanctions regime" against Iran's leaders, who "continue to be defiant as to the demands of the free world," he said.

The U.N. nuclear watchdog agency issued a report Wednesday showing that Tehran is accelerating its uranium enrichment program in defiance of international demands.

The U.S. 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 president said he had directed Secretary of State Condoleezza Rice to work with European partners to "develop further sanctions."

Iraq Bill Supported

On Iraq, the president said that "August is going to be a tough month," as the U.S. troop surge comes to full strength. "We expect heavy fighting in the next weeks and months."

Video: Bush Expects Tough Summer

After months of tough negotiations and a veto, Bush said he would support a 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.

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.

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 added that the strategy he is 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 of Indiana -- recommendations at first generally ignored by the administration.

Immigration 'Very Emotional

"Many Americans are rightfully skeptical" about immigration legislation now making its way through Congress, Bush said. "It's a very emotional, hard issue for members of both parties."

Video: Stop Border Smuggling

But he said a compromise bill in the Senate that looks at the issue in a comprehensive way is the best way to control illegal immigration.

Pointing out that he has campaigned for president twice on the issue and that his administration has supported a doubling in the size of the Border Patrol, new walls and fences between the U.S. and Mexico and changes in how suspected illegal immigrants are processed, Bush said his administration is addressing the desire of Americans to see the borders more secure.

However, since illegal immigrants are coming to the United States to provide for their families by "doing jobs that Americans won't do," there has to be a way for them to travel and work legally on temporary visas, Bush said.

There also needs to be a way for illegal residents to become citizens if they want to be, and that the process must include background checks, fines, a probation period, and then a requirement to "get to the back of the line," Bush said. But, "You can't kick them out. It's impractical."

He said he would rather have them come legally, on a temporary basis, than have them "stuffed into the back of an 18-wheeler" by an illegal human smuggling operation.

"I knew this would be an explosive issue," Bush said. "It's easy to hold up someone here working illegally as a political taregt."

"We've been through immigration debates before in this country. They can bring out the worst in people sometimes," Bush said.

Standing By Gonzales

Bush said any wrongdoing uncovered in the firings of eight federal prosecutors will be "taken care of," but that doesn't mean he's dropping his support for Attorney General Alberto Gonzales.

Congress and the Justice Department have been conducting separate probes into the firings, which Democrats said were improperly political.

Bush said he continues to have confidence in Gonzales and urged House and Senate committees to end their hearings.

Gonzales' former White House counsel, Monica Goodling, told a House panel on Wednesday about what she called an "uncomfortable" conversation with the attorney general.

She said Gonzales tried to review the events leading up to the firings well after he and top Justice officials knew they would be called to testify.