President Bush says he will veto the new bill in its current form

Under the bill, further funding would be dependent o­n events in Iraq meeting certain, as yet undefined, benchmarks of progress.

President George W Bush said he would veto the bill but hinted a compromise was possible, saying the idea of setting benchmarks "made sense".

Mr Bush has already vetoed o­ne bill linking funding to troop withdrawal.

The Democratic-controlled House of Representatives passed the bill late o­n Thursday in a 221-205 vote.

Although the new bill has passed in the House, most Republicans oppose it. That makes it unlikely it will be passed in the Senate, where the Democrats have a very slender majority.

'No blank cheque'

The new bill would ring-fence about half of the money, $52.8bn, that Mr Bush has requested to fund the war in Iraq.

Lawmakers would then vote in July o­n whether to release this money o­n the basis of a report from Mr Bush o­n progress towards political, economic and security targets.

Mr Bush said such "piecemeal" funding would not work.

He has resisted any attempt to link war funding to withdrawal but is coming under increasing pressure from some Republicans, as well as Democrats, over progress in Iraq.

House Speaker Nancy Pelosi repeated her assertion that Americans will not write a "blank cheque" for President Bush to fight the war in Iraq.

"This is a bill he should like," she said.

"It has his benchmarks, it asks for a progress report, he must have some confidence in what he is doing, and then leave it up to the Congress to make a judgment in July, what could be fairer than that?"

Republican Representative Jerry Lewis said the Democrats' unwillingness to fully fund the war in Iraq called into question their commitment to US troops.

"It is legislation that says to the troops we support you conditionally today but don't expect Congress to support you two months from now... Is this the message we want to send to al-Qaeda?"

Earlier o­n Thursday, the House of Representatives rejected a separate and largely symbolic bill calling for US troops to withdraw from Iraq within 180 days of the legislation being passed.

The vote, proposed by a group of anti-war Democrats, was rejected by 255 votes to 171.

'Speed up the clock'

Speaking to reporters prior to the votes but after he met defence officials at the Pentagon, Mr Bush reiterated his determination to strike down the legislation before Congress in its current form.

One message I have heard from people of both sides is that benchmarks make sense, and I agree President George W Bush

"I'll veto the bill if it is this haphazard, piecemeal funding and I made that clear," he said. "We reject that idea. It won't work."

However, the president's statement that he would consider discussion o­n putting benchmarks in a war-funding bill represents a shift in his position.

"One message I have heard from people of both sides is that benchmarks make sense, and I agree," he said.

Mr Bush said he had asked his chief of staff, Joshua Bolten, to talk to congressional leaders "to find common ground" o­n setting benchmarks.

The idea of "benchmarks", which have been unspecified so far but may include targets for the Iraqi government to meet, began circulating o­n Capitol Hill after the first war funding bill was vetoed.