Iraqi delegates have welcome the $33 billion pledged by countries at the Madrid summit even though it is less than is required.
But $33 billion pledged so far remains well short of the estimated $56 billion needed for reconstruction over a four-year period. Despite this the US Treasury Secretary Mr John Snow says the critical factor now is to deliver on the promises the money makes possible.
The head of Iraq's governing council, Mr Ayad Allawi, said the balance between grants, loans and potential oil revenue was almost right.
The pledges also see the US remain far and away the biggest single donor with an estimated $20 billion pledged. The anti-war troika of France, Russia and Germany declined to contribute until the Iraq has a democratically-elected government.
In Washington, Bush said in a statement issued by the White House that the "success at the Iraq Donors' Conference marked significant progress for freedom in Iraq".
"The contributions will help bring necessary funds, goods and services to the Iraqi people," he said. A free Iraq would serve as "an example and inspiration to advocated of reform and progress throughout the Middle East. And a free Iraq will be a source of stability and hope for that region," President Bush added.
The money came even though the security situation remains dire in Iraq, where three American soldiers and two children were killed as the pledges were being made.
Iraqis in Madrid told donors they would do their best not to come back with a begging bowl. "We are a proud people, we want nothing more than to be proud again," said Mr Allawi.