The two leaders held talks the day after Mr Bush used an address to the General Assembly of the United Nations to say the United States was right to remove Saddam Hussein from power.
Relations between Mr Bush and Mr Schroeder had soured because the German was critical of the war in Iraq. He further angered Mr Bush with the tenor of his 2002 re-election bid and by siding with France and Russia this year to block explicit UN approval of the invasion to oust Saddam.
But following their talks on Wednesday the two men declared an end to their bitter row over Iraq and vowed to work together to stabilize and rebuild that war-scarred nation.
Mr Bush said: “The first thing I told him, I said, ‘Look, we’ve had differences. And they’re over.’ And we’re going to work together.”
Mr Schroeder agreed that relations were mended, saying through an interpreter: “We very much feel that the differences there have been have been left behind and put aside by now. We have both agreed that we want to look into the future together”.
Like France and Russia, Germany wants a faster end to the US occupation and a transfer of power to Iraqis as soon as possible – something Mr Bush said could be “neither hurried nor delayed.”
Furthermore, Mr Schroeder gave no sign of relenting on his refusal to send German soldiers to Iraq and limited his pledge of assistance to an offer to help train Iraqi security forces, be they police or military.
However, Mr Bush is not thought to have made much headway at the United Nations and subsequent meetings in enlisting more international troops and money to stabilize and rebuild Iraq.
Mr Schroeder did say he optimistic about eventual passage of a US-backed UN resolution aimed at doing just that. France has said the measure must set a timetable for the transfer to self-rule in Iraq.