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 Mr Bush said the passing of the law was an urgent priority  |
He called on the House of Representatives to approve the law, already passed by the Senate.
An initial act, allowing warrantless tapping of phone calls and e-mails of suspected terrorists, expired on 17 February but did not grant immunity.
Lawsuits have been filed against some of the firms which took part.
They are accused of violation of privacy.
He told the White House on Tuesday "abusive" lawsuits against telecoms firms would "aid our enemies" by teaching them how to duck surveillance.
'Dangerous intelligence gap'
The House of Representatives allowed the law to expire this month after refusing to rubber stamp a Senate bill that would give telecommunication firms immunity from lawsuits.
The legislation allowed government spying on foreign telephone calls and electronic correspondence without court permission.
"The law expired, the threat to America has not expired," Mr Bush said.
Mr Bush told the White House on Tuesday "a dangerous intelligence gap" had opened up last year before the temporary Protect America Act was passed in August.
"Allowing these lawsuits to proceed would be unfair," he said. "If any of these companies helped us, they did so after being told by our government that their assistance was legal and vital to our national security.
"Allowing the lawsuits to proceed could aid our enemies, because the litigation process could lead to the disclosure of information of how we conduct surveillance and it would give al-Qaeda and others a roadmap as to how to avoid the surveillance."
He warned firms would refuse to co-operate with the intelligence services if they were not granted immunity from lawsuits.
In a wide-ranging speech Mr Bush also:
 Sarkozy wants to improve relations with English-speaking Africa |
The country has military accords with several of its ex-colonies and recently helped Chad repulse a rebel attack.
"They must reflect Africa as it is today and not as it was yesterday," Mr Sarkozy told South Africa's parliament in Cape Town during a state visit.
It was also agreed a French firm would build a $2bn coal power plant in South Africa, which is facing a power crisis.
In a wide-ranging speech, Mr Sarkozy also touched on migration - comparing the situation in Europe with South Africa which also has an influx of African migrants.
He said quotas had to be considered and that a new partnership was needed to end the brain drain from Africa, which was harming the continent.
He said, for example, that there were more Beninois doctors in France than in Benin itself.
The French president also said Africa should have at least one permanent seat on the UN Security Council and that France would no longer accept major world affairs being discussed without a leading African country being involved.
Military intervention
Mr Sarkozy said Europe and Africa needed to forge new ties based on equality and respect.
FRENCH MILITARY PRESENCE 
Largest military base: Djibouti Other main bases: Dakar (Senegal); Libreville (Gabon) 1,200 troops in Chad, including in the capital, N'Djamena, to protect French nationals 300 troops in Bangui (CAR) Approx 3,000 troops in Ivory Coast under a UN mandate Source: Council on Foreign Relations
France's defence changes would mark a "major turning point", he said, although he was not proposing to scrap all existing agreements, but he wanted to adapt them to the realities of the present.
That included transparency, with all defence agreements to be made public in their entirety.
France has what it terms "defence agreements", providing for direct military intervention, with Central African Republic, Gabon, Senegal and Ivory Coast.
It also has several military bases on the continent with thousands of troops stationed in Djibouti, Senegal and Gabon.
He said France had no reason to maintain armed forces on the continent indefinitely and that Africa had to take responsibility for its own security issues.
President Sarkozy said that in no way was France pulling out or disengaging, but he wanted his country to work to a greater extent alongside the African Union.
Correspondents say Paris has been accused in the past of supporting dubious dictators in Africa while ignoring corruption.
Rapport
Mr Sarkozy arrived in South Africa after a brief stay in Chad, where French forces helped evacuate foreigners as rebels entered the capital last month.
France provided logistical help to the government in N'Djamena.
The BBC's Mohammed Allie in Cape Town says Mr Sarkozy and his South Africa counterpart Thabo Mbeki had a good rapport.
Mr Mbeki thanked Mr Sarkozy for the speed with which he agreed to send French engineers to advise South Africa about its power supply crisis.
"The president immediately agreed that within a few days all of those engineers will be here," Mr Mbeki said.
The two leaders were present at the signing ceremony for Alstom to build the coal-fuelled power plant.
Mr Sarkozy's visit is going to centre on other trade issues on Friday and he is accompanied by 40 French business executives on his visit.
IPL chairman Lalit Modi said he opted against signing English players because of international commitments, but did not rule out their future involvement.
"Most of the English players say they'd like to play," Modi told BBC Sport.
But an England and Wales Cricket Board spokesman said centrally contracted players were out of bounds to the IPL.
The ECB said that England's commitments to the International Cricket Council's Future Tours Programme, which ends in 2012, would mean that the 12 players signed to central contracts would be unavailable to the IPL.
The massive wages on offer in India will be difficult for England's stars to ignore with the Board of Control for Cricket in India (BCCI) already earning over £800m selling TV rights and team franchises for the IPL.
Over 70 of the world's best cricketers will be in India for the start of the inaugural tournament, which begins on 18 April.
606: DEBATE DL
Last week's player auction in Mumbai raised a staggering $42m (£21.2m) as eight city franchises fought to recruit the likes of India one-day captain Mahendra Singh Dhoni and Australia all-rounder Andrew Symonds.
Dhoni, who attracted the highest bid at the auction, will earn $1.5m (£770,095) in wages, while Symonds will pocket $1.35m (£681,861) for his role in the seven-week competition.
And Modi, vice-chairman of the BCCI as well as chairman of the IPL, said England's best players are keen to get involved.
"We have a huge amount of pressure from the English players to be participating in it," he said.
"It's not that we couldn't sign them (but) because it directly conflicts with the English games.
"Sooner or later we will look at adjusting our programmes while we try to bring our league forward.
"The objective would be in the future we would be working with the ECB to ensure the overlap doesn't take place."
However, Modi believes county cricket - traditionally the leading wage earner for overseas Test players - will be left trailing the IPL as the world's best players choose to play in India rather than England.
David Hussey is caught up in a dispute between Notts and the IPL
"They have decided to sign with us over and above the counties," said the 42-year-old.
"The counties are going to deprived of these players going forward."
Lancashire chief executive Jim Cumbes agrees that county cricket faces a huge threat from the IPL.
"I think it's inevitable the way things are going that we'll lose some of our top players," he told BBC Radio 5 Live.
"I don't think we can compete, certainly not financially. A county player might be offered £60,000 to £70,000 a year to play for his county and if he's offered a quarter of a million to play half the cricket abroad... I'd ask the question of anybody: where would you go?
"It's also going to have a big influence on overseas players. They're not going to be available to us for two or three months at the start of the English season so is it going to be worth signing them?"
The creation of the league has already caused conflict between Nottinghamshire and their overseas player David Hussey.
Despite penning a new two-year contract at Trent Bridge in October last year, the Australian has also been signed by Kolkata for $625,000 (£315,579).
If he does play in India, Hussey is expected to miss Nottinghamshire's first five championship matches and all eight Friends Provident one-day games.
"We were expecting him to come to us in the middle of April," Notts director of cricket Mick Newell told BBC Radio 5 Live.
"We all want to work towards a compromise. David is keen to play in the IPL, the sums people are talking about are mind-blowing for cricket, so I'm sure both sides are keen to find a solution."
However, Modi insists the IPL only needs a No Objection Certificate (NOC) from Cricket Australia, not via Nottinghamshire, for Hussey's authorisation to play.
He said: "David Hussey has nothing to do with Nottinghamshire, as far as we are concerned he only needs an NOC from his home board."
 The deal follows talks lasting more than a month |
At a ceremony in Nairobi, the two men put their signatures to a power-sharing deal brokered by ex-UN head Kofi Annan.
A coalition government comprising members of the current ruling party and opposition will now be formed.
Some 1,500 people died in political violence after Mr Odinga said he was robbed of victory in December's polls.
POWER-SHARING DEAL New two-party coalition government to be set up Cabinet posts to be divided equally between parties Raila Odinga to take new post of prime minister, can only be dismissed by National Assembly Two new deputy PMs to be appointed, one from each member of coalition
International observers agreed that December's election count was flawed.
The post-election violence saw thousands of people targeted because they belonged to ethnic groups seen as either pro-government or pro-opposition. About 600,000 people fled their homes.
Although the level of violence had fallen in recent weeks, there were concerns that a failure to reach a deal would lead to a fresh round of blood-letting.
Negotiations between the government and opposition lasted more than a month, stalling several times.
The BBC's Adam Mynott, in Nairobi, says both sides have given ground from their original positions to reach this agreement.
Portfolios shared
The new coalition will be headed by President Kibaki, with Mr Odinga - whose Orange Democratic Movement (ODM) is the largest in parliament - probably taking the newly created post of prime minister.
Compromise was necessary for the survival of this country 
Kofi Annan
Each party will nominate a deputy prime minister, with other ministerial portfolios being divided equally between the two parties.
Correspondents say both parties are now likely to begin wrangling over who gets what position in the new government, with the post of finance minister likely to prove the most contentious.
After the deal was reached, Mr Annan said: "Compromise was necessary for the survival of this country."
He urged all Kenyans to support the agreement, saying: "The job of national reconciliation and national reconstruction is not for the leaders alone. It must be carried out in every neighbourhood, village, hamlet of the nation."
'New chapter'
Speaking after the signing, Mr Kibaki said: "This process has reminded us that as a nation there are more issues that unite than that divide us...
"We've been reminded we must do all in our power to safeguard the peace that is the foundation of our national unity... Kenya has room for all of us."
Political violence has ignited rivalry over land 
Mr Odinga said: "With the signing of this agreement, we have opened a new chapter in our country's history - from the era or phase of confrontation to the beginning of co-operation.
"We, on our side, are completely committed to ensuring that this agreement will succeed."
Both men thanked those who had stood by Kenya in what Mr Odinga called its "hour of need", including Mr Annan, the African Union, the European Union, the United States and the UN.
They also urged Kenyans to move forward together without ethnic divisions.
'Very basic issue'
After 8 weeks of uncertainty in the political atmosphere as well as peace, there is somehow a glimpse of hope and light to the beautiful land of Kenya.
A spokesman for the US state department, Tom Casey, said the agreement was "an important and very positive step forward".
He added: "It allows the Kenyan people to move forward with a very basic issue of governance."
British Prime Minister Gordon Brown welcomed the new power-sharing agreement.
"Kenya's leaders have reached a power-sharing agreement that represents a triumph for peace and diplomacy, and a renunciation of the violence that has scarred a country of such enormous potential," he said.
In western Kenya, the scene of the some of the worst violence, there was some scepticism about the agreement.
Paul Waweru, 56, who fled his home and is now living in a camp in Eldoret, said: "The deal between Raila and Kibaki will help to cool down the situation but I doubt if it will enable us to get back to our homes."
But in Nairobi's Kibera slum, there were celebrations.
"The general mood among people is that of happiness," said Nelson Ochieng.
"We are tired of the political crisis. I was a barber but my shop was burnt. Now I'm jobless, and the end of this crisis means that I can rebuild my business."
Bush speech 
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