Barack Obama opens his State of the Union address by saying that after a decade of war America's troops are coming home.
The President vowed that the war in Afghanistan would end by late 2014 and that another 34,000 American troops would be returning over the next year.
"This drawdown will continue. And by the end of next year, our war in Afghanistan will be over," Mr Obama said in his annual address.
He said that al Qaeda was a "shadow of its former self" and no longer posed the kind of threat that needed tens of thousands of US troops to fight abroad.
However, he said that al Qaeda affiliates had appeared elsewhere in the world including Yemen and Somalia and said that in future the US would help those countries to provide their own security to fight terrorism.
Mr Obama also said he would take "firm action" against the "provocations" of North Korea, after the state carried out its third nuclear test.
Mr Obama prepares for his State of the Union addressHe said: "The regime in North Korea must know that they will only achieve security and prosperity by meeting their international obligations.
"Provocations of the sort we saw last night will only isolate them further, as we stand by our allies, strengthen our own missile defence and lead the world in taking firm action in response to these threats."
Mr Obama promised to spark economic growth and create jobs.
He told Congress: "A growing economy that creates good, middle-class jobs -- that must be the North Star that guides our efforts.
"It is our generation's task, then, to reignite the true engine of America's economic growth -- a rising, thriving middle class."
The President greets workers dealing with the aftermath of superstorm SandyHe warned against dramatic budget cuts saying that they would cost jobs and threaten the military.
He said: "That's why Democrats, Republicans, business leaders, and economists have already said that these cuts, known here in Washington as 'the sequester', are a really bad idea."
The President said that the United States and Europe would launch talks on what would be the world's largest free trade zone.
He said: "Tonight, I am announcing that we will launch talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union -- because trade that is free and fair across the Atlantic supports millions of good-paying American jobs."
The move answered mounting calls from Europe to pursue a grand trade pact to spur growth on both sides of the Atlantic.
Michelle Obama arrives to hear her husband give his addressMr Obama also warned Congress that if they didn't act on climate change, that he would.
He tackled climate sceptics in the rival Republican Party by noting that 12 of the world's hottest years on record took place in the past 15 years.
Mr Obama told them: "We can choose to believe that superstorm Sandy, and the most severe drought in decades, and the worst wildfires some states have ever seen were all just a freak coincidence.
"Or we can choose to believe in the overwhelming judgement of science -- and act before it's too late."
Mr Obama also reinforced his commitment to tightening the country's gun laws saying that police chiefs wanted Congress to ban "weapons of war" and magazines carrying large amounts of ammunition so officers would not be outgunned.
"I know this is not the first time this country has debated how to reduce gun violence. But this time is different," Mr Obama said. "Each of these proposals deserves a vote in Congress."
Hadiya Pendleton: teenager shot dead after performing at the inaugurationThe president made his plea to a chamber watched by gun violence victims and relatives, including the parents of Chicago shooting victim Hadiya Pendleton, who performed at Obama's inaugural parade just days before she was gunned down.
"Just three weeks ago, she was here, in Washington, with her classmates, performing for her country at my inauguration," Mr Obama said in paying tribute to the 15-year-old. "And a week later, she was shot and killed in a Chicago park after school, just a mile away from my house."
Mr Obama also refered to the shooting at the Sandy Hook Elementary School in Connecticut in December that claimed the lives of 20 young schoolchildren and six adults.
Also in the crowd was Gabrielle Giffords, who was shot in the head at a mass shooting two years ago in her Arizona district.
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