US President George W Bush tonight proposed the largest military buildup in 21 years for his war on terrorism as initial successes in the campaign came under threat from destabilizing factional fighting in Afghanistan.
Iran, warned along with Iraq and North Korea by Mr Bush not to threaten America or support rebel groups, rejected US accusations it helped Taliban and al Qaeda fighters flee Afghanistan and challenged the United States to prove it.
The whereabouts of al Qaeda leader Osama bin Laden and his ally, Taliban leader Mullah Mohammad Omar, remained a mystery despite the rout of their forces in the US campaign in Afghanistan.
In combative mood in front of cheering US troops, Mr Bush touted his budget proposal sent to Congress today, increasing military spending by 12 per cent to $379 billion next year to defeat the dangers of terrorism beyond Afghanistan.
"We're unified in Washington on winning this war. One way to express our unity is for Congress to set the military budget, the defense of the United States, as the No. 1 priority," Mr Bush said at Eglin Air Force Base in Florida.
The increase in a budget that already dwarfs other nations' military spending comes despite recession-hit government income that has been restrained by tax cuts. The buildup will be the biggest hike since former President Ronald Reagan in the Cold War faced what he called the "evil empire" of the Soviet Union.
"Terrorist states and terrorist allies are an axis of evil, seeking weapons of mass destruction," Mr Bush said. "But I put them on notice: The United States of America will not permit the world's most dangerous regimes to threaten us with the world's most destructive weapons."
In response to the threat of preemptive strikes, Iran, Iraq and North Korea have condemned Mr Bush for warmongering without evidence to support his claims.
Today, Iran's Vice President Mr Mohammad Abtahi accused the United States of seeking to "dominate the world" and military officials said they were prepared to answer any US attacks.
He also challenged the statements of Defense Secretary Mr Donald Rumsfeld yesterday that Iran had helped some 250 Taliban and al Qaeda leaders flee across the border with Afghanistan.
Meanwhile an EU spokesman expressed quiet irritation at the rhetoric lodged against Iran, Iraq and North Korea, saying officials disagreed with bracketing the nations together as "evil."
In eastern Afghanistan, there were conflicting interpretations of how talks went in the town of Gardez between rival clans from the majority Pashtun ethnic group after some 50 people were killed last week in a two-day battle for power.
Clashes have also erupted in the north between fighters of an ethnic Uzbek warlord and an ethnic Tajik commander.
The violence highlights the problem facing the interim administration in uniting the country, after two decades of conflict left parts of Afghanistan divided into rival fiefdoms.