(Reuters) - President Barack Obama Tuesday
announced the end of the U.S. combat mission in Iraq, marking a
major milestone since the 2003 U.S. invasion that toppled
dictator Saddam Hussein.

Following are highlights of his nationally televised
address from the Oval Office at the White House:

PRESSES IRAQ TO FORM NEW GOVERNMENT

"Tonight, I encourage Iraq's leaders to move forward with a
sense of urgency to form an inclusive government that is just,
representative, and accountable to the Iraqi people. And when
that government is in place, there should be no doubt: the
Iraqi people will have a strong partner in the United States.
Our combat mission is ending, but our commitment to Iraq's
future is not."

VIOLENCE WILL NOT END, ALL U.S. TROOPS WILL LEAVE

"Extremists will continue to set off bombs, attack Iraqi
civilians and try to spark sectarian strife. But ultimately,
these terrorists will fail to achieve their goals."

"Consistent with our agreement with the Iraqi government,
all U.S. troops will leave by the end of next year. As our
military draws down, our dedicated civilians -- diplomats, aid
workers, and advisors -- are moving into the lead to support
Iraq as it strengthens its government, resolves political
disputes, resettles those displaced by war, and builds ties
with the region and the world."

U.S. ECONOMY TOP PRIORITY

"Our most urgent task is to restore our economy, and put
the millions of Americans who have lost their jobs back to
work. To strengthen our middle class, we must give all our
children the education they deserve, and all our workers the
skills that they need to compete in a global economy. We must
jump-start industries that create jobs, and end our dependence
on foreign oil. We must unleash the innovation that allows new
products to roll off our assembly lines, and nurture the ideas
that spring from our entrepreneurs. This will be difficult. But
in the days to come, it must be our central mission as a
people, and my central responsibility as President."

AMERICAN PEOPLE "SHORT-CHANGED" BY WAR

"Unfortunately, over the last decade, we have not done what
is necessary to shore up the foundation of our own prosperity.
We have spent over a trillion dollars at war, often financed by
borrowing from overseas. This, in turn, has short-changed
investments in our own people, and contributed to record
deficits. For too long, we have put off tough decisions on
everything from our manufacturing base to our energy policy to
education reform. As a result, too many middle class families
find themselves working harder for less, while our nation's
long-term competitiveness is put at risk."

OBAMA RECALLS BUSH'S WAR, PRAISES HIS PATRIOTISM

"From this desk, seven and a half years ago, President Bush
announced the beginning of military operations in Iraq. Much
has changed since that night. A war to disarm a state became a
fight against an insurgency. Terrorism and sectarian warfare
threatened to tear Iraq apart. Thousands of Americans gave
their lives; tens of thousands have been wounded. Our relations
abroad were strained. Our unity at home was tested.

"I am mindful that the Iraq War has been a contentious
issue at home. Here, too, it is time to turn the page. This
afternoon, I spoke to former President George W. Bush. It's
well known that he and I disagreed about the war from its
outset. Yet no one could doubt President Bush's support for our
troops, or his love of country and commitment to our
security."

AFGHANISTAN AND SEPT 11

"Americans across the political spectrum supported the use
of force against those who attacked us on 9/11. Now, as we
approach our 10th year of combat in Afghanistan, there are
those who are understandably asking tough questions about our
mission there. But we must never lose sight of what's at stake.
As we speak, al Qaeda continues to plot against us, and its
leadership remains anchored in the border region of Afghanistan
and Pakistan. We will disrupt, dismantle, and defeat al Qaeda,
while preventing Afghanistan from again serving as a base for
terrorists. And because of our drawdown in Iraq, we are now
able to apply the resources necessary to go on offense."

TIMETABLE FOR DRAWDOWN FROM AFGHANISTAN

"Within Afghanistan, I have ordered the deployment of
additional troops who -- under the command of General David
Petraeus -- are fighting to break the Taliban's momentum. As
with the surge in Iraq, these forces will be in place for a
limited time to provide space for the Afghans to build their
capacity and secure their own future. But, as was the case in
Iraq, we cannot do for Afghans what they must ultimately do for
themselves. That's why we are training Afghan Security Forces
and supporting a political resolution to Afghanistan's
problems."

"The pace of our troop reductions will be determined by
conditions on the ground, and our support for Afghanistan will
endure. But make no mistake: this transition will begin --
because open-ended war serves neither our interests nor the
Afghan people's."