"I recognize that many Americans voted last night to register their displeasure with the lack of progress being made" in Iraq, the president said. "Yet I also believe most Americans - and leaders here in Washington from both political parties - understand we cannot accept defeat."

Gates led the CIA from November 1991 to January 1993 under former President George H.W. Bush. The president said he met with Gates over the weekend at Bush's ranch in Crawford, Texas.

"Bob Gates will bring a fresh perspective and great managerial experience," Bush said.

Bush was asked by reporters whether he retained full confidence in Cheney, a chief advocate of the war, and whether the vice president would serve out the rest of his term.

"Yes he does, yes he will," Bush replied.

Yet only a week ago, Bush told The Associated Press and other reporters in an interview that he expected Rumsfeld and Cheney to stay through the end of his last two years in the White House. Asked Wednesday about that comment, Bush acknowledged he intentionally misled reporters because he want to avoid a change at the Pentagon during a hotly contested election.

"I didn't want to inject a major decision about this war in the final days of a campaign," Bush said. "And so the only way to answer that question, and to get you onto another question was to give you that answer. ... The other reason why is I hadn't had a chance to visit with Bob Gates yet, and I hadn't had my final conversation with Don Rumsfeld yet, at that point."

The president joked that he had given House Minority Leader Nancy Pelosi, in line to become the first female speaker of the House, the name of a Republican interior decorator to help her pick out drapes for her new office. The comment was poke at the California Democrat's pre-election remark about having her pick of Capitol suites.

As to the role played in Tuesday's widespread GOP losses, Bush said, "I believe Iraq had a lot to do with the election, but I think there were other factors as well." He suggested that a variety of congressional scandals may also have played a role.

He said he would seek to find common ground with Pelosi, but without either of them compromising their principles.

Bush was asked at his East Room news conference about Pelosi's past derogatory comments describing him as a liar and dangerous.

"I know when campaigns end and governing begins," he said. "If you hold grudges in this line of work, you never get anything done."

Bush also got in a dig at his trusted top political adviser, Karl Rove. Rove is widely credited with Bush's presidential victories in 2000 and 2004 and GOP gains in the 2002 congressional elections. As recently as last week, Rove predicted Republican would retain both House and Senate.

"I obviously was working harder in the campaign than he was," said Bush, who stumped hard for GOP candidates, especially troubled ones in traditionally Republican states.

Bush said he wanted to hear other views on Iraq, and was looking forward to recommendations by a commission headed by former Secretary of State James A. Baker III and former Democratic Rep. Lee Hamilton of Indiana. Bush said expected to meet with the group, which includes Gates, early next week.

Still, Bush added, "We're not going to leave before the job is done."

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