The president said Thursday, "We are led, by events and common sense, to one conclusion. The survival of liberty in our land increasingly depends on the success of liberty in other lands."
"The best hope for peace in our world is the expansion of freedom in all the world."
The president outlined a sweeping defense of efforts to spread personal liberty, saying only freedom could ensure America's security and future.
"All who live in tyranny and hopelessness can know: The United States will not ignore your oppression, or excuse your oppressors. When you stand for your liberty, we will stand with you," he said.
He declared that the policy of the United States would be to "seek and support the growth of democratic movements and institutions in every nation."
In addition to stressing the need to stand as a beacon of liberty abroad, the president also focused on what he called freedom at home in the form of an "ownership society".
"We will widen the ownership of homes and businesses, retirement savings and health insurance -- preparing our people for the challenges of life in a free society," the president said. "By making every citizen an agent of his or her own destiny, we will give our fellow Americans greater freedom from want and fear and make our society more prosperous and just and equal."
The president's inauguration was also marked by a massive security effort that cordoned off some 100 blocks of Washington, D.C. with miles of chain-link fence and concrete barriers.
Rooftop snipers could be seen on many downtown buildings and thousands of visitors had to file through designated checkpoints to get close to the festivities.
His close advisers said the president felt his re-election with 51 percent of the popular vote offered him an opportunity to make bold policy decisions in his second term.
"The president fully understands that he has an opportunity to change America and to change the world, and the window of opportunity won't stay open very long," White House Chief of Staff Andrew Card told ABC's "Good Morning America."
But the president also appeared to acknowledge Thursday the deep divisions that the recent election has left in the American public.
"We have known divisions, which must be healed to move forward in great purposes and I will strive in good faith to heal them," Mr. Bush said, adding that he did not believe the separations defined the nation.
And those divisions remained apparent during the day, with thousands of protesters chanting and shouting their displeasure with the commander in chief over the war in Iraq and an array of domestic matters.
"There are a lot of different reasons why people are participating in this action," said Jet Heiko, who has organized a group to turn their backs to the president when he passes along the inaugural parade route. "Mostly it's a lot of people who feel that George Bush has turned his back on them for a variety of reasons -- Iraq, health care, Social Security, educational reform issues."
Democrats too attempted to use the day as a way to rally political opposition to the president. In a fund-raising email to supporters, House Minority Leader Nancy Pelosi, D-Calif., said, "Personally, I don't feel much like celebrating. So I'm going to mark the occasion by pledging to do everything in my power to fight the extremist Republican's destructive agenda."
Senate Minority Leader Harry Reid, D-Nev., said he hoped the president would reach out to the Democrats more than he did during his first term.
"I think we were all excited four years ago when the president said he wanted to be a uniter, not a divider. It didn't work out that way. This time he doesn't have to run for re-election, and I hope he follows through on that theme, a uniter, not a divider. This city needs some unification," Reid told CNN.
President Bush's approval rating has taken a hit in recent months, with a Jan. 19 CBS News poll indicating that only 49 percent of Americans approve of the job he is doing, the lowest of any re-elected president in more than 50 years.
Despite the challenges ahead, President Bush said Wednesday that the inauguration marked "a great tradition of hope and renewal in our Nation's Capitol" and he was eager to move forward into his second four years.
But he also looked beyond the next term, telling cheering supporters, "I'm going to give it my all for four more years, and then I'm coming home to Texas."