U.S. President George W. Bush gave his last press conference at the White House on Monday, 8 days before the inauguration of incoming president Barack Obama, calling for a cease-fire in the Gaza Strip, but emphasizing Israel's right to defend itself.

As Israeli troops continued targeting Hamas infrastructure in the Gaza Strip for the 17 day, Bush said that Hamas must stop firing rockets into Israel in order for an effective cease-fire to take hold in Gaza and said Israel should avoid harming innocent people there.

"Israel has a right to defend herself," the president told reporters at the White House. "Obviously, in any of these kinds of situations I would hope that she would continue to be mindful of innocent folks and that they help expedite the delivery of humanitarian aid."

"I'm for a sustainable cease-fire, he said, adding that such a truce would require Hamas' agreement to halt firing rockets into Israel. There will not be a sustainable cease-fire if they continue firing rockets. I happen to believe the choice is Hamas' to make."

Bush gave his backing to Egyptian-led efforts to secure a truce that would end the smuggling of weapons into Gaza through underground tunnels. Israel has been pounding the underground arteries with air strikes since it launched the operation on Dec. 27. Officials in Gaza say some 870 Palestinians have been killed. More than a dozen Israelis, including 10 soldiers, have died.

"The best way to ensure that there is a sustainable cease-fire is to work with Egypt to stop the smuggling of arms into the Gaza that enables Hamas to continue to fire rockets," Bush said. "Countries that supply weapons to Hamas have got to stop and the international community needs to continue to pressure them to stop providing weapons."

Egypt, which often serves as a mediator between Israel and Hamas, has been playing a key role in trying to forge a cease-fire. Egypt's state-owned news agency reported progress in truce talks with Hamas but provided no specifics.

International Mideast envoy Tony Blair was in Cairo on Monday, meeting with President Hosni Mubarak following talks with Israeli leaders on Sunday. Egypt has put forward a three-stage proposal to end the fighting.

"I think the elements of an agreement for the immediate cease-fire are there," Blair said, adding that, while more work needed to be done, he hoped to see a cease-fire in the coming days.

Israel's representative to the talks is in close contact with Egypt but, in a sign that more work is needed, postponed a trip to Cairo.

Bush repeated his belief that his administration had made progress in trying to seal a peace deal between Israel and the West Bank-based Palestinian Authority led by Mahmoud Abbas but acknowledged that U.S. President-elect Barack Obama would face stiff challenges in keeping up the effort.

"Will this ever happen? I think it will," he said. "And I know we've advanced the process."

Obama has remained largely silent on foreign policy issues, including the Middle East, since his election, sticking to the mantra that there is only one president at a time.

On Sunday, he repeated that stance, but suggested that he understood the Israeli position.

"A basic principle of any country is that they've got to protect their citizens," the president-elect said on ABC television's This Week program, adding that his team would be ready on Jan. 20 to be immediately engaged in the Middle East peace process as a whole.

"[They] are going to be engaging with all of the actors there [to] create a strategic approach that ensures that both Israelis and Palestinians can meet their aspirations," Obama said, adding that deaths of Israeli and Palestinian civilians was heartbreaking and made him much more determined to try to break a deadlock that has gone on for decades now.

Bush and Obama have both described Iran as a continuing menace. In his Monday news conference, Bush warned that Iran is still dangerous. And Obama did likewise in his ABC appearance, accusing Iran of backing terrorist groups in the region, notably Hamas and Lebanon's Hezbollah movement, and of trying to develop nuclear weapons.

"I think that Iran is going to be one of our biggest challenges," Obama said.

But, unlike Bush, Obama said he would take a new approach to Iran, which has been shunned by the Bush administration.

"I've outlined my belief that engagement is the place to start," Obama said. He said he would advocate a new emphasis on respect and a new emphasis on being willing to talk, but also "a clarity about what our bottom lines are. We are in preparations for that. We anticipate that we're going to have to move swiftly in that area."