"This is no time for Congress to abandon practices that have a proven track record of keeping America safe," the president said.
Supporters of the legislation say it would preserve the United States' ability to collect critical intelligence and raise country's moral standing abroad.
House Speaker Nancy Pelosi said Congress would work to override Bush's veto next week. "In the final analysis, our ability to lead the world will depend not only on our military might, but on our moral authority," said Pelosi, D-Calif.
But based on the margin of passage in each chamber, it would be difficult for the Democratic-controlled Congress to turn back the veto. It takes a two-thirds majority, and the House vote was 222-199 and the Senate's was 51-45.
Senate Majority Leader Harry Reid said Bush often warns against ignoring the advice of U.S. commanders on the ground in Iraq. Yet the president has rejected the Army Field Manual, which recognizes that harsh interrogation tactics elicit unreliable information, said Reid, D-Nev.
"Democrats will continue working to reverse the damage President Bush has caused to our standing in the world," Reid said.
Jennifer Daskal, senior counterterrorism counsel at Human Rights Watch, said Bush "will go down in history as the torture president" for defying Congress and allowing the CIA to use interrogation techniques "that any reasonable observer would call torture."
"The Bush administration continues to insist that CIA and other nonmilitary interrogators are not bound by the military rules and has reportedly given CIA interrogators the green light to use a range of so-called 'enhanced' interrogation techniques, including prolonged sleep deprivation, painful stress positions, and exposure to extreme cold," Daskal said. "Although waterboarding is not currently approved for use by the CIA, Attorney General Michael Mukasey has refused to take it off the table for the future."
The intelligence bill would limit CIA interrogators to the 19 techniques allowed for use by military questioners. The Army field manual in 2006 banned using methods such as waterboarding or sensory deprivation on uncooperative prisoners.
Bush said the CIA must retain use of "specialized interrogation procedures" that the military does not need. The military methods are designed for questioning "lawful combatants captured on the battlefield," while intelligence professionals are dealing with "hardened terrorists" who have been trained to resist the techniques in the Army manual, the president said.
"We created alternative procedures to question the most dangerous al-Qaida operatives, particularly those who might have knowledge of attacks planned on our homeland," Bush said. "If we were to shut down this program and restrict the CIA to methods in the field manual, we could lose vital information from senior al-Qaida terrorists, and that could cost American lives."
The 19 interrogation techniques include the "good cop/bad cop" routine; making prisoners think they are in another country's custody; and separating a prisoner from others for up to 30 days.
Among the techniques the field manual prohibits are:
--hooding prisoners or putting duct tape across their eyes.
--stripping prisoners naked.
--forcing prisoners to perform or mimic sexual acts.
--beating, burning or physically hurting them in other ways.
--subjecting prisoners to hypothermia or mock executions.
It does not allow food, water and medical treatment to be withheld. Dogs may not be used in any aspect of interrogation.
But waterboarding is the most high-profile and contentious method in question.
It involves strapping a person down and pouring water over his cloth-covered face to create the sensation of drowning. It has been traced back hundreds of years to the Spanish Inquisition and is condemned by nations around the world and human rights organizations as torture.
The Detainee Treatment Act of 2005 includes a provision barring cruel, inhuman and degrading treatment for all detainees, including CIA prisoners, in U.S. custody. Many people believe that covers waterboarding.
There are concerns that the use of waterboarding would undermine the U.S. human rights efforts overseas and could place Americans at greater risk of being tortured when captured.
The military specifically prohibited waterboarding in 2006. The CIA also prohibited the practice in 2006 and says it has not been used since three prisoners encountered it in 2003.
But the administration has refused to rule definitively on whether it is torture. Bush has said many times that his administration does not torture.
The White House says waterboarding remains among the interrogation methods potentially available to the CIA.
"Because the danger remains, we need to ensure our intelligence officials have all the tools they need to stop the terrorists," Bush said.