In a major address at the U.S. Defense Department's National Defense University in Washington, Obama also said it is time to modify U.S. war-footing in the wake of the Sept. 11, 2001, terror attacks.
Obama said the most recent terror attacks -- the Boston Marathon bombings and the attack on the U.S. Consulate in Benghazi, Libya -- remind us "our nation is still threatened by terrorists" but it's time to reassess the "nature of today's threats."
Obama noted no one has escaped from U.S. military or maximum-security prisons, including people who have been prosecuted in civilian courts for terror-related crimes.
"There is no justification beyond politics for Congress to prevent us from closing a facility that should never have been opened," Obama said.
"Today, I once again call on Congress to lift the restrictions on detainee transfers from Gitmo."
Obama noted it costs nearly $1 million annually for each of the 166 prisoners housed at Guantanamo at a time when Congress is cutting spending on such vital programs as education.
"I know the politics are hard," he said. "But history will cast a harsh judgment on this aspect of our fight against terrorism and those of us who fail to end it. Imagine a future -- 10 years from now or 20 years from now -- when the United States of America is still holding people who have been charged with no crime on a piece of land that is not a part of our country."
Obama also talked about disclosures this week four U.S. citizens had been killed in drone operations.
"For the record, I do not believe it would be constitutional for the government to target and kill any U.S. citizen -- with a drone or a shotgun -- without due process. Nor should any president deploy armed drones over U.S. soil," Obama said.
"But when a U.S. citizen goes abroad to wage war against America -- and is actively plotting to kill U.S. citizens; and when neither the United States, nor our partners are in a position to capture him before he carries out a plot -- his citizenship should no more serve as a shield than a sniper shooting down on an innocent crowd should be protected from a SWAT team."
Obama said Congress passed legislation within days of the Sept. 11, 2001, attacks that greatly expanded the government's ability to uncover terrorist plots but he said 12 years after the fact he will "not sign laws designed to expand this mandate further" to protect civil liberties.
"Our systematic effort to dismantle terrorist organizations must continue. But this war, like all wars, must end," he said.
"We strengthened our defenses -- hardening targets, tightening transportation security, and giving law enforcement new tools to prevent terror," Obama said. "Most of these changes were sound. Some caused inconvenience. But some, like expanded surveillance, raised difficult questions about the balance we strike between our interests in security and our values of privacy. And in some cases, I believe we compromised our basic values."
Obama acknowledged the use of drones to strike terrorist targets has resulted in civilian casualties -- a result of war that cannot be avoided although, he said, the military has done its best to minimize the death toll.
Obama said no president can guarantee terror will be wiped out but he said U.S. strategy must evolve, first by finishing off al-Qaida and its offshoots, dismantling networks "of violent extremists that threaten America" with the help of allies.
Obama said drone strikes against terrorists have been effective and papers found at Osama bin Laden's compound in Pakistan acknowledge that.
"Plots have been disrupted that would have targeted international aviation, U.S. transit systems, European cities and our troops in Afghanistan. Simply put, these strikes have saved lives," Obama said.
By the same token, he said, drone strikes shouldn't be abused and to that end he has signed the Presidential Policy Guidance, which establishes clear guidelines, oversight and accountability.
"America does not take strikes when we have the ability to capture individual terrorists -- our preference is always to detain, interrogate, and prosecute them," Obama said. "America cannot take strikes wherever we choose -- our actions are bound by consultations with partners, and respect for state sovereignty. America does not take strikes to punish individuals -- we act against terrorists who pose a continuing and imminent threat to the American people, and when there are no other governments capable of effectively addressing the threat. And before any strike is taken, there must be near-certainty that no civilians will be killed or injured -- the highest standard we can set."