The conditions-dependent drawdown process is scheduled to begin July 2011 and end by 2014 when U.S. and coalition forces are scheduled to turn over all security responsibilities to the Afghans, Obama said during a briefing on the annual status report on Afghanistan and Pakistan.
"(We) are on track to achieve our goals," Obama said, although gains made are "fragile and still reversible."
In Afghanistan, the United States is focused on the three areas -- military efforts to break the Taliban's momentum and train Afghan forces to take the lead in security, civilian work to promote effective governance and development, and regional cooperation "because our strategy has to succeed on both sides of the border," Obama said.
The president also said neighboring Pakistan can do more to ferret out terrorist safe havens in tribal regions near the country's border with Afghanistan.
The review, coming a year after Obama announced a new war strategy and deployed 30,000 more U.S. troops, shows both progress and challenges, Obama said.
Obama said the United States will fully support an Afghan political process that includes reconciliation with those Taliban who break from al-Qaida and accept the Afghan constitution.
Obama said the United States would maintain its focus its relationship with Pakistan.
"Increasingly, the Pakistani government recognizes that terrorist networks in its border regions are a threat to all our countries, especially Pakistan," Obama said. "We've welcomed major Pakistani offensives in the tribal regions. We will continue to help strengthen Pakistan's capacity to root out terrorists."
Progress, however, hasn't come fast enough, "so we will continue to insist to Pakistani leaders that terrorist safe havens within their borders must be dealt with," the president said. "At the same time, we need to support the economic and political development that is critical to Pakistan's future. As part of our strategic dialogue with Pakistan, we will work to deepen trust and cooperation."
"It will take time to ultimately defeat al-Qaida," the president said, adding that the United States would "never waver" from its goal of disrupting, dismantling and defeating terrorist groups using Afghanistan as a base.
"(None) of these challenges that I've outlined will be easy," Obama said. "There are more difficult days ahead, but as a nation we can draw strength from the service of our fellow Americans. ... We will forge enduring partnerships with people who are committed to progress and to peace. And we will continue to do everything in our power to ensure the security and the safety of the American people."
Secretary of State Hillary Clinton said the administration wasn't sugarcoating the situation in Afghanistan because the review considered both the good and the bad.
"I think we're being very clear-eyed and realistic," Clinton said.
She said the administration believes it is "creating a better context" for fighting the insurgency.
The secretary said the United States did not develop the relationships, coordination or understanding with Afghanistan or Pakistan in recent years and "frankly walked away from" the region 25-30 years ago, which helped contribute to the situation today.
Defense Secretary Robert Gates said the review "keeps us focused" on what can and cannot be achieved in the region, such as working to ensure Pakistan shuts down safe havens for terrorists.
"Failing to deal with safe havens is a real challenge," Gates said.