Outgoing U.S. President George Bush says the biggest challenge facing his successor, president-elect Barack Obama, is the threat from an enemy that "would like to inflict damage" on Americans.

On Monday, during his final news conference as president, Bush addressed questions on a wide range of topics, from the conflict in Gaza to why so many people seem to dislike him, to mistakes he may have made during his tenure.

Bush said Obama's main priority upon taking office next week, should be the fact there are enemies out there that "would like to inflict damage" on Americans.

He also said he still considered Iran and North Korea -- once considered members of his so-called "Axis of Evil" along with Iraq -- to be dangerous.

During the often-nostalgic news conference Bush looked back on the arc of his presidency, and was even willing to admit to some mistakes, or regrets, along the way.

"Clearly, putting 'mission accomplished' on an aircraft carrier was a mistake," Bush said, referring to a May 1, 2003 televised address from the USS Abraham Lincoln.

Bush, appearing on an aircraft carrier decorated with the slogan, announced that the end of major combat operations in Iraq had arrived.

However, violence only increased after the announcement and many looked at the moment as an indication of Bush's unrealistic perspective on the war.

Bush said he had also spent a lot of time looking back on his handling of Hurricane Katrina, and wondering whether he should have landed Air Force One in the region, to get a first-hand look at the damage in New Orleans.

He has faced major criticism for his response to the catastrophe, and perceived failure to act on reports that such a disaster was imminent.

However, Bush said he has reached the conclusion that had he landed in Baton Rouge or New Orleans, his critics would have said his presence took police and security away from their important work helping evacuate people from New Orleans.

He also said the failure to find weapons of mass destruction in Iraq was a major disappointment.

"One thing about the presidency is you can only make decisions on the information at hand," Bush said. "You don't get to have information after you've made the decision, that's not the way it works, and you stand by your decisions and you do your best to explain why you made the decisions you made."

Mideast policy

Bush repeated his call for the creation of a separate Palestinian state as the solution to the longstanding conflict in Israel.

Bush also said Hamas must stop its attacks on Israel, noting that a "sustainable" ceasefire will only happen if Hamas stops firing missiles across the border.

He repeated another position he has maintained steadily, saying he believes Israel has the right to defend itself -- but said both sides must do everything they can to avoid civilian deaths.

America's moral standing

When asked whether America's moral standing in the world had been damaged by his presidency, Bush strongly disagreed.

In his travels around the world, he said, the vast majority of people he has met still look to the U.S. as a beacon of freedom in the world.

"I disagree with this assessment that people view America in a dim light. I just don't agree with that," Bush said.

He acknowledged that the creation of the Guantanamo Bay detention centre and his refusal to join the Kyoto climate change accord have angered some, said but Africa, India, China, and much of Europe still look favourable on the U.S.

"I strongly disagree with the assessment our moral standing has been damaged," Bush said. "It may have been damaged somewhat among some of the elite, but people still understand that America stands for freedom."

Bush also dismissed the suggestion that his own personal popularity has suffered.

"Most people I see when I'm moving around the country -they're not angry and they're not hostile people. Well, you say you never meet people who disagree with you -- well that's not true. I meet a lot of people who don't agree with the decisions I make, but they have been civil in their discourse.

"I view those who get angry and hostile and yell and say bad things as just a very few people in the country."

Abraham Lincoln also faced harsh criticism, Bush said.