US President Bush, delivering a Memorial Day message surrounded by the graves of thousands of military dead, said Monday that the United States must continue fighting the war on terror in the name of those have already given their life in the cause.

Iraq war veterans Air National Guard Master Sgt. Michael Gormley, right, of the West Roxbury neighborhood of Boston, holds his daughter Kate, 3, while standing next to and his brother, US Army Lt. Col. Bill Gormley, during a Memorial Day service in the Gardens at Gethsemane cemetery in Boston, Monday, May 29, 2006. [AP Photo]

"The best way to pay respect is to value why a sacrifice was made," Bush said, quoting from a letter that Lt. Mark Dooley wrote to his parents before being killed last September in the Iraqi city of Ramadi.

Noting that some 270 fighting men and women of the nearly 2,500 who have fallen since the terror attacks of Sept. 11, 2001, are buried at Arlington National Cemetery, Bush said, "We have seen the costs in the war on terror that we fight today."

"I am in awe of the men and women who sacrifice for the freedom of the United States of America," the president declared, drawing a long standing ovation from the troops, families of the fallen and others gathered at the cemetery's 5,000-seat white marble amphitheater.

"Here in the presence of veterans they fought with and loved ones whose pictures they carried, the fallen give silent witness to the price of liberty and our nation honors them this day and every day," he said.

The nation can best honor the dead by "defeating the terrorists. ... and by laying the foundation for a generation of peace," Bush said.

The US president spoke after laying a wreath at the Tomb of the Unknowns. He ventured across the Potomac River on a sun-splashed Memorial Day just a short time after signing into law a bill that restricts protests at military funerals.

At the White House, Bush signed the Respect for America's Fallen Heroes Act," passed by Congress largely in response to the activities of a Kansas church group that has staged protests at military funerals around the country, claiming the deaths symbolized God's anger at U.S. tolerance of homosexuals.

The new law bars protests within 300 feet of the entrance of a national cemetery and within 150 feet of a road into the cemetery. This restriction applies an hour before until an hour after a funeral. Those violating the act would face up to a $100,000 fine and up to a year in prison.

US President George W. Bush delivers Memorial Day remarks at the Arlington National Cemetary Ampitheater in Arlington, Virginia. Bush again vowed to complete US military missions around the world as the United States honoured its war dead with the American toll in Iraq closing on 2,500. [Reuters]

Monday's observance at Arlington National Cemetery was not a funeral, so demonstrators were free to speak their minds at the site. Bush's motorcade passed several on the way in, including a small group that held signs saying, "Thank God for dead soldiers" and "God hates fags."

Approximately 10 people from the Washington, DC, chapter of FreeRepublic.com, a self-styled grass roots conservative group, stood across the road with signs supporting US troops. A large sign held by several people said, "God bless our troops, defenders of freedom, American heroes."

The FreeRepublic.com group was trying to counter demonstrations by the Kansas-based group, led by the Rev. Fred Phelps. He previously had organized protests against those who died of AIDS and gay murder victim Matthew Shepard.

In an interview when the House passed the bill that Bush signed Monday, Phelps accused Congress of "blatantly violating" his First Amendment rights. He said that if it became law, he would continue to demonstrate but would abide by the law's restrictions.

Bush signed a second bill Monday that allows combat troops to deposit tax-free pay into individual retirement accounts. Supporters of the legislation argued that rules governing these accounts were punishing soldiers in Afghanistan and Iraq who earn only tax-free combat pay.