Brussels, Belgium ? President Bush and European leaders settled simmering differences about Iraq but plunged into a troublesome new dispute Tuesday over the lifting of an arms embargo against China. Bush warned Congress might retaliate if Europe revokes the 15-year ban.

Bush said lifting the embargo, imposed after the bloody 1989 Tiananmen Square crackdown on pro-democracy activists, “would change the balance of relations between China and Taiwan and that’s of concern.” But French President Jacques Chirac and German Chancellor Gerhard Schroeder said the ban should go. “It will happen,” Schroeder said.

The China quarrel was a jarring note on an otherwise upbeat day of reconciliation, handshakes and hopes for better relations.

“First time I’ve been called charming in a while,” Bush said after a NATO summit. It fit the tone of the moment, but in truth a reporter had asked how his “major charm offensive” in Europe might win over some of the people who don’t like him.

Bush also held a summit with leaders of the 25-nation European Union. “Europe and America have reconnected,” EU Commission President Jose Manuel Barroso told a news conference with Bush.

In a show of unity after bitter disputes, all 26 countries in NATO pledged money, equipment or personnel to train Iraqi security forces, though many of the pledges were modest.

Estonia said it would send one staff officer to Iraq, and $65,000. France offered one officer to help mission coordination at NATO headquarters, and said it would train 1,500 Iraqi military police in Qatar outside NATO’s mission.

“The NATO training mission is an important mission, because after all, the success of Iraq depends upon the capacity and the willingness of the Iraqis to defend their own selves against terrorists,” Bush said. “Every contribution matters.”

The European Union and the United States, meanwhile, agreed to jointly host a conference to rally and coordinate international aid to Iraq.

Consulting with his harshest critics on Iraq, Bush met with Chirac over dinner Monday night, will travel today to Germany to visit with Schroeder and meets Russian President Vladimir Putin on Thursday in Slovakia. Chirac said America’s attitude is becoming “more realistic … It is progress.”

Many Europeans are nervous about a possible U.S. strike against Iran to stop its suspected nuclear weapons program, and Bush gave mixed signals about American intentions.

“This notion that the United States is getting ready to attack Iran is simply ridiculous,” the president said with a slight smile. “Having said that, all options are on the table.” He made a similar statement last week, saying a president never says never about military action.