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President Barack Obama said on Tuesday night the United States was committed to achieving peace in the Middle East and fighting terror.

"To seek progress towards a secure and lasting peace between Israel and her neighbors, we have appointed an envoy to sustain our effort," said Obama in his first address to Congress, referring to special U.S. envoy George Mitchell.

Obama underscored his administration's commitment to fighting terrorism, but said this could take new forms in countries including Afghanistan, Pakistan and Iraq. His speech came after administration officials said the U.S. plans to withdraw most of its troops from Iraq by August 2010, 19 months after Obama's inauguration.

"Along with our outstanding national security team, I'm now carefully reviewing our policies in both wars, and I will soon announce a way forward in Iraq that leaves Iraq to its people and responsibly ends this war," he said.

Mitchell is set to pay a visit to the region soon with Secretary of State Hillary Clinton, who will reportedly pledge $900 million for the reconstruction of Gaza.

Obama was speaking to both chambers of Congress, the Supreme Court, the Cabinet and special guests.

He pledged to forge a new and comprehensive strategy for Afghanistan and Pakistan to defeat Al-Qaida and combat extremism. "Because I will not allow terrorists to plot against the American people from safe havens halfway around the world," he vowed. "We will not allow it."

The speech had the trappings of a State of the Union address, the annual presidential presentation to Congress. Technically it was not one, though, because Obama has been in office just five weeks, not long enough to present such a speech.

Still, it was a night for the president to sketch out his priorities in asetting unmatched for the rest of the year.

The president also said the U.S. had reached a dire day of reckoning after years of shortsighted economic decisions. But he promised worried Americans that better days are ahead.

Obama said his efforts to rescue the U.S. economy will not derail his long-term goals of creating a national health care system, improving education and developing alternative energy sources.

"The weight of this crisis will not determine the destiny of this nation," Obama said. "Tonight I want every American to know this: We will rebuild, we will recover, and the United States of America will emerge stronger than before."