Bush spying claim causes US storm
Bush's top aides say he did not break the law
The New York Times says the National Security Agency was allowed to spy on hundreds of people without warrants.
The NSA is normally barred from eavesdropping within the US.
Republican Senator John McCain called for an explanation, while Senator Arlen Specter, Senate Judiciary Committee chairman, said he would investigate.
"There is no doubt that this is inappropriate," said Mr Specter, also a Republican, adding that Senate hearings would be held early next year as "a very, very high priority".
The allegations coincided with a setback for the Bush administration, as the Senate rejected extensions to spying provisions in the Patriot Act. (more)