"We stand united with people around the world who've been targeted by terrorists -- from a school in Pakistan to the streets of Paris," Obama said in the annual State of the Union Address.
"We will continue to hunt down terrorists and dismantle their networks, and we reserve the right to act unilaterally, as we've done relentlessly since I took office to take out terrorists who pose a direct threat to us and our allies," the US president said.
At the same time, he said the US had learnt lessons from its war against terrorism in Iraq and Afghanistan.
"Instead of Americans patrolling the valleys of Afghanistan, we've trained their security forces, who've now taken the lead, and we've honoured our troops' sacrifice by supporting that country’s first democratic transition," he said.
"Instead of sending large ground forces overseas, we're partnering with nations from South Asia to North Africa to deny safe haven to terrorists who threaten America," he added.
Obama said that US military leadership in Iraq and Syria is stopping the Islamic State's advance and asked lawmakers to "show the world that we are united in this mission" by passing a resolution to authorise the use of force against the militant group that holds a large swathe of Iraq and Syria under its control as a self-declared caliphate.
Obama denounced the "anti-Semitism" that has resurfaced in certain parts of the world.
He also stressed "we continue to reject offensive stereotypes of Muslims -- the vast majority of whom share our commitment to peace."
The US leads best when it combines military power with strong diplomacy, he said, adding "That's exactly what we're doing right now -- and around the globe, it is making a difference."
"We're upholding the principle that bigger nations can't bully the small -- by opposing Russian aggression, supporting Ukraine's democracy, and reassuring our NATO allies," he said.
In view of the recent hacking into the network of Sony Pictures, Obama said, "No foreign nation, no hacker, should be able to shut down our networks, steal our trade secrets, or invade the privacy of American families, especially our kids."
He said the US will integrates intelligence to combat cyber threats, "just as we have done to combat terrorism."
The President asked the Congress the pass the legislation that the US needs to better meet the evolving threat of cyber-attacks.
"If we don't act, we'll leave our nation and our economy vulnerable. If we do, we can continue to protect the technologies that have unleashed untold opportunities for people around the globe," Obama said.
Arguing that Americans cherish their civil liberties, Obama said he has prohibited torture and asked for constrained use of drones.
He also reiterated his call to close down the Guantanamo Bay terrorist detention centre.
"As Americans, we have a profound commitment to justice -- so it makes no sense to spend 3 million dollars per prisoner to keep open a prison that the world condemns and terrorists use to recruit. Since I’ve been President, we've worked responsibly to cut the population of GITMO in half.
"Now it's time to finish the job. And I will not relent in my determination to shut it down. It's not who we are," Obama said.
"As Americans, we respect human dignity, even when we’re threatened, which is why I've prohibited torture, and worked to make sure our use of new technology like drones is properly constrained.
"We need to uphold that commitment if we want maximum cooperation from other countries and industry in our fight against terrorist networks," he said.
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