NEW ORLEANS — President Bush said Wednesday that "hope is coming back" to New Orleans with the help of $126 billion in disaster aid poured into the Gulf Coast region over three years after Hurricane Katrina.

Bush tempered his upbeat remarks by acknowledging much more work must be done.

He spoke before a friendly audience at Jackson Barracks, a historic Louisiana National Guard post badly damaged by Katrina. The crowd gave a standing ovation when Bush said he recently agreed to a request by Republican Gov. Bobby Jindal and other state leaders to give Louisiana 30 years to repay $1.8 billion for levee improvements in the New Orleans area. The money initially was to be repaid by 2011.

State officials said they needed 30 years to avoid hurting a still-recovering economy.

Bush seemed in no hurry to get through his prepared remarks, spending the first few minutes acknowledging Jindal, New Orleans Mayor Ray Nagin and other notables. The bad blood between city officials and the White House after the Bush administration's bungled response to the Katrina disaster was set aside, at least for the moment.

"The mayor and I have had some quality time," Bush said of his difficult history with Nagin.

"The good future is here," Bush said. "I predicted New Orleans would come back as a stronger and better city. We helped deliver $126 billion in taxpayer money."

Sen. Mary Landrieu, D-La., said in an interview with The Associated Press this week that the New Orleans recovery was far from complete and that key projects won't be finished without more federal money.

Bush traveled to New Orleans and later to nearby Gulfport, Miss., after appearing at a Veterans of Foreign Wars convention in Orlando, Fla.

"Who would have thought three years after the storm the president could come and say, 'New Orleans, Louisiana, is on its way back as a stronger and better city."' Bush said.

"I think the message here today is hope is being restored. Hope is coming back."