The president's state visit has begun with the Queen's formal welcome amid pomp and splendour at Buckingham Palace.

Amid unprecedented security the president's day began with a formal ceremony at the top of the Mall.

Following the ceremony the Queen and the president exchanged gifts before touring the Royal art collection.

Bush later moved to the Banqueting House in Whitehall for a lunchtime reception - where the president delivered an impassioned defence of the invasion of Iraq.

"History has shown that there are times when countries must use force to defend the peace and to defend values," he told his audience.

The speech re-committed America "to continue to strengthen a very strong relationship with a steadfast ally and friend".

But in a blow to Tony Blair there have been no signs that the president, who is soon to face re-election, will yield on the issues of trade tariffs or environmental commitments.

In his speech Bush confronted those who believe it will prove impossible to bring democracy to the Middle East.

A massive security operation is underway for the event - the first state visit by a US president since Woodrow Wilson in 1918.

Some 14,000 police officers have joined 700 secret service agents to guard the president.

But the security operation was dealt an early blow following tabloid revelations that a reporter managed to secure employment inside Buckingham Palace.

The reporter, who took photographs inside the president's suite, said he would have served breakfast to senior members of the Bush administration had he not resigned on Tuesday night.

Buckingham Palace said it was mounting an investigation of security but it insisted that the vetting of staff was a matter for the Metropolitan Police.

Roads around Whitehall and the Mall were closed to make way for the ceremonial welcome shortly before 10.00am.

Despite the intense security the police say are protesters being allowed to make their voice heard.

Bush was later set to join the Queen, the prime minister and senior members of the government and opposition at a state dinner in Buckingham Palace.

But he altered plans to meet the families of the victims of Britons killed in the September 11 attacks following security concerns.

Thousands of protesters are also set to take to the streets in protest at the war in Iraq.

The Bush administration has signalled it is relaxed about the demonstrations.

"Democracy is a wonderful thing. Freedom of speech and the right to peacefully assemble are the very foundation of our democracy," said White House spokesman McClellan.

"But the president believes strongly that freedom is a universal right of all people. And that's a message he will continue to talk about. He will continue to talk about the importance of advancing freedom, because advancing freedom advances peace."

Another key issue of concern has been the fate of the British terror suspects detained at Guantanamo Bay.

Downing Street and the White House have confirmed talks are continuing but no deals have been reached and no announcements are expected.

Campaigners have urged the prime minister to raise the issue with the president urgently. Amnesty International called for the men to be either charged with a recognisable criminal offence or be released.

"It is crucial that Tony Blair uses the opportunity afforded by this visit to press for lawyers and - where relevant - for fair trials for Guantanamo Bay prisoners," said UK director Kate Allen.

"Tony Blair's message to Mr Bush ought to be clear: Guantanamo Bay is nothing short of a disgrace and basic human rights need to be restored."

On the divisive issue of trade tariffs, the president also appears set to stand firm.

But he and the prime minister are expected to discuss the wider issue of trade reforms.

During his visit Bush is also set to meet with the families of British service personnel killed in Iraq.

Number 10 confirmed last night that the meetings will go ahead - although it stressed they will be held in private.

The families of several British soldiers killed in Iraq have condemned the state visit.

Mike Aston, the father of Corporal Russell Aston, who was killed in June by a mob near Basra, said the timing was insensitive.

"My son is gone. He went to war on the 14th of February and I will have to get used to the fact that I will never see him again," he said.

"To actually to come face to face with the perpetrators of that war would give me a great deal of anger. I want nothing to do with it."