The initiative, spearheaded by Senator John McCain, initially met fierce resistance in the Bush administration, especially from Vice President Dick Cheney. Bush had threatened to veto the measure as hindering the war on terrorism.
But McCain - a prominent Republican lawmaker who was tortured as a prisoner of war in Vietnam - refused to budge and won a climbdown announced at a White House meeting with Bush.
Bush said they shared a common goal: 'To make it clear to the world that this government does not torture and that we adhere to the international convention of torture, whether it be here at home or abroad.'
Bush's retreat is a sign that he is politically weaker than in his first term, when the Republican-controlled Congress rarely defied him on important legislation. Cheney had sought an exemption for the CIA, but ultimately the White House gave up on that, too.
The veto threat was widely seen as a nearly indefensible misstep from an administration that publicly declared time after time that the U.S. does not practise or condone torture.
Pressure on the U.S. government has built up over the past two years with the abuse scandal at Baghdad's Abu Ghraib prison and reports of detainee mistreatment in Afghanistan and at the Guantanamo Bay prison in Cuba.
In recent weeks, the reported existence of secret CIA prisons in Eastern Europe has fuelled international distrust of U.S. methods.
McCain said the anti-torture measure, expected to win approval in both houses of Congress by the weekend, would help repair the U.S. image abroad.
'We've sent a message to the world that the United States is not like the terrorists,' McCain said Thursday. 'We have no grief for them, but what we are is a nation that upholds values and standards of behaviour and treatment of all people, no matter how evil or bad they are.'
Bush's veto threat appeared to defy the administration's rhetoric on torture, and commentators and editorials heaped criticism on Bush for his stand.
McCain, who spent more 5 1/2 years in Vietcong captivity, thanked Bush for helping to overcome the impasse.
'Now we can move forward and make sure that the whole world knows that, as the President has stated many times, that we do not practise cruel, inhuman treatment or torture,' said McCain.
He said his legislation would help the U.S. 'enormously in winning the war for the hearts and minds of people throughout the world in the war on terror'.
The Senate passed McCain's proposal by 90-9 votes in October, with Republicans joining Democrats. The lower House of Representatives expressed its support for the measure Wednesday.
After the overwhelming Senate vote, the White House tried to amend the legislation by creating an exemption for the CIA, but McCain refused to budge.
He met Thursday with Bush at the White House and Republican Senator John Warner, a supporter of the provision and chairman of the Armed Services Committee.
'We've been working very closely with Senator McCain, his staff and others in Congress to make sure that we have a legal framework in place to address the detentions and interrogations while making sure that we still are able to have the tools necessary to prevent attacks from happening in the first place,' said White House spokesman Scott McClellan before the deal was announced.
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