US President George W. Bush has defended his actions to avert a collapse of the financial system and protect America from another terrorist attack as he mounted a farewell bid to polish his troubled legacy.

Five days before handing over the presidency to Barack Obama, Bush delivered a televised final address to the American people in which he sought to define a White House record that some historians are already ranking among the worst ever.

But even as he focused on what he saw as his successes, Bush was preparing to leave Obama with unfinished wars in Iraq and Afghanistan, a bitter conflict in Gaza, a US economy deep in recession and a US image badly tarnished overseas.

'Facing the prospect of a financial collapse, we took decisive measures to safeguard our economy,' Bush said from the White House, referring to a massive government intervention he ordered, counter to his free-market roots. 'The toll would be far worse if we had not acted.'

Trying to reassure recession-weary Americans, Bush said: 'Together, with determination and hard work, we will restore our economy to the path of growth. We will show the world once again the resilience of America's free enterprise system.'

Obama has said dealing with the economic meltdown, the worst financial crisis since the Great Depression and one that has sent shockwaves across the globe, will be a top priority.

Bush warned, however, that the gravest challenge facing the incoming president remained the threat of another terrorist attack like the al Qaeda strikes on September 11, 2001.

He acknowledged that some of his actions in response to 9/11 had been controversial but he stood by them and reasserted his with-us-or-against-us doctrine widely criticized overseas.

'There is legitimate debate about many of these decisions. But there can be little debate about the results,' the two-term Republican said.

'America has gone more than seven years without another terrorist attack on our soil,' he said.

Some of Bush's actions after the 9/11 attacks, such as establishing a detention center for terrorism suspects at Guantanamo and approving harsh interrogation methods that human rights groups said amounted to torture, severely damaged America's image abroad. Obama has vowed to close the facility.

'Our enemies are patient, and determined to strike again,' Bush said in a brief address from the White House with vice president Dick Cheney, his cabinet and several dozen selected citizens in attendance.

'Good and evil are present in this world, and between the two there can be no compromise.'

Positive spin

With the clock ticking down on his presidency, Bush and his aides used his last day of public events before Inauguration Day to try to put a positive spin on his record.

Farewell speeches are a ritual for departing US leaders, but the stakes are especially high for Bush, who will step down with one of the lowest public approval ratings of any president in modern times - in the mid-20 percent range.

In a final ceremony at the State Department earlier on Thursday, Bush defended his foreign policy - from the unpopular war in Iraq to nuclear standoffs with Iran and North Korea. 'We have made the world freer,' he said.

Bush touted security gains in Iraq as vindication for a US troop buildup he ordered there at a time of rampant sectarian violence in 2007.

The Iraq war, launched without UN authorization in 2003, undercut US credibility abroad and contributed to a resounding victory by Obama against John McCain, the nominee of Bush's Republican Party, in the November election.

Bush also made clear he saw his failed effort to broker peace between Israel and the Palestinians in his final year as not totally in vain, despite a 3-week-old Israel-Hamas war in Gaza