(Adds senator's comment)

By Matt Spetalnick

WASHINGTON, Sept 20 (Reuters) - President George W. Bush on Thursday defended his plan for limited U.S. troop cuts in Iraq and denounced Democrats for not taking a stronger stand against an anti-war group's attack on the credibility of his top Iraq commander.

Bush was speaking at his first news conference since delivering a televised address endorsing Gen. David Petraeus' proposal to withdraw about 20,000 troops by July. But as in his speech last Thursday, he defied calls for a dramatic change of course in Iraq.

"Progress will yield fewer troops (in Iraq)," Bush said. "In other words, return on success is what I said."

As he continued fending off pressure for a swift U.S. exit from the unpopular war, Bush took aim at Democratic critics over an ad that excoriated Petraeus for his congressional testimony last week.

The liberal anti-war group MoveOn.org drew Republican outrage for its full-page ad in The New York Times that mocked Petraeus as "General Betray Us" for declaring that a troop build-up in Iraq was making progress.

"I thought the ad was disgusting," said Bush, who has relied on the general's aura of credibility in Congress to help sell his strategy. "I felt like the ad was an attack not only on Gen. Petraeus but on the U.S. military, and I was disappointed that not more leaders in the Democrat party spoke out strongly against that ad."

"That leads me to come to this conclusion: that most Democrats are afraid of irritating a left-wing group like MoveOn.org -- are more afraid of irritating them than they are of irritating the United States military," Bush added. "That was a sorry deal."

Responding to Bush's condemnation, Eli Pariser, MoveOn.org's executive director, said: "What's disgusting is that the president has more interest in political attacks than developing an exit strategy to get our troops out of Iraq."

The U.S. Senate later voted 72-25 to repudiate the ad. Twenty-two Democrats joined 49 Republicans and one independent in denouncing it.

Oregon Sen. Gordon Smith, one of a handful of Republicans who has voted for troop withdrawals, said the MoveOn.org controversy had backfired on Democrats by discouraging fence-sitting Republicans from abandoning Bush.

It was also a chance for Bush, whose supporters sometimes cast those opposed to his Iraq strategy as unpatriotic, to shift focus from continuing problems in Iraq.

DEMOCRATIC EFFORTS STALLED

Efforts by Democrats to force change in Iraq policy looked stalled for now, a day after Bush's fellow Republicans blocked a Senate bill that would have granted troops more leave time between deployments in Iraq. It had been seen as the Democrats' best near-term chance of gaining leverage over war planning.

Bush said Iraqi leaders must do more to bridge the sectarian divide but cited progress at the local level.

"Part of the reason why there's not this instant democracy in Iraq is because people are still recovering from Saddam Hussein's brutal rule," he said. "I heard somebody say, Where's Mandela?' Well, Mandela's dead because Saddam Hussein killed all the Mandelas."

Bush was referring to the former South African leader who helped reconcile his country after decades of racial apartheid. Mandela has receded from active politics but is still alive.

Bush voiced continued confidence in Robert Gates' support for his war strategy after the defense secretary told a New York Times columnist, when asked if the 2003 invasion of Iraq was worth doing: "If I'd known then what I know now, would I have done the same? I think the answer is, 'I don't know.'"

In his speech, Bush said security improvements had made it possible to start drawing down forces. But that will only roll back troop strength, now at 169,000, to around the same levels they were before Bush ordered a buildup in January.

Democratic leaders have said Bush is trying to obscure the fact that most of the troops being withdrawn would have left anyway under current deployment timetables. (Additional reporting by Andy Sullivan and Susan Cornwell)

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