Here’s the passage from the Today Show. I agree with Ramesh that it’s not as bad as some are making it sound. But it’s still a gaffe:

LAUER: You said to me a second ago, one of the things you’ll lay out in your vision for the next four years is how to go about winning the war on terror. That phrase strikes me a little bit. Do you really think we can win this war of ter–on terror? For example, in the next four years?
Pres. BUSH: I have never said we can win it in four years?
LAUER: No, I’m just saying, can we win it? Do you say that?
Pres. BUSH: I don’t–I don’t think we can win it. But I think you can create conditions so that the–those who use terror as a tool are less acceptable in part of the world, let’s put it that way. I have a two-pronged strategy. On the one hand is to find them before they hurt us. And that’s necessary. I’m telling you it’s necessary.
The country must never yield, must never show weakness. Must continue to lead, to find the al-Qaeda, al-Qaeda affiliates, who are hiding around the world and who want to harm us and bring them to justice. History has shown that it can work, that spreading liberty does work. After all, Japan is our close ally, and my dad–and I don’t know about your relatives–but fought against the Japanese. And here Koizumi, Prime Minister Koizumi, is one of the closest collaborators I have in working to make the world a more peaceful place.