India and the United States said today they had sealed a landmark civilian nuclear co-operation pact.
"We have concluded an historic agreement today on nuclear power," Mr Bush told a joint news conference with Indian Prime Minister Manmohan Singh.
"I am looking forward to working with our United States Congress to change decades of law that will enable us to move forward in this important initiative."
The deal, which would give India access to US nuclear technology to meet its soaring energy needs, has been opposed by some members of the US Congress because India has not signed the Nuclear Non-Proliferation Treaty.
As Mr Bush met Mr Singh in India, a car bomb killed five people outside the US consulate and Marriott Hotel in Karachi in neighbouring Pakistan, the country that is next on the itinerary of MR Bush's South Asia tour.
Mr Bush said at least one US citizen, a foreign service officer, was among those killed, but said he would not be put off from visiting the country, a key ally in his war on terror.
"Terrorists and killers are not going to prevent me from going to Pakistan," he said. At least 35 people were wounded in the blast in the southern port city. Mr Bush is due to hold talks in Pakistan on Saturday.
He arrived in the Indian capital yesterday after a surprise visit to Afghanistan to visit US troops.
The three-day visit to India was seen as a growing recognition in Washington of the strategic and economic significance of India after decades of mistrust between the two countries.
The nuclear co-operation deal was the centrepiece of the visit, and negotiators had worked late into the night last night to bridge the "last few gaps" between the two sides, officials said.
Under the deal, India has agreed to separate its civilian and military nuclear programmes and place the civilian plants under international inspections. In return, the United States is offering nuclear technology and fuel. That would end decades of nuclear isolation for India, which was placed under international sanctions after conducting nuclear tests in 1974 and 1998.
The deal has been strongly opposed by non-proliferation lobbies in the United States and India's nuclear establishment, which is against American interference in what has been an isolated, indigenous nuclear programme.
India's extensive atomic weapons programme to counter Pakistan and China's nuclear arms is a further concern for some members of the US Congress, who have cast doubt on the viability of any deal between Mr Singh and Mr Bush.
India has refused to join the Nuclear Non-Proliferation Treaty, calling it discriminatory, leading to its isolation.