President Barack Obama declared Tuesday that America must move away from a permanent war footing to give diplomacy a chance to resolve some of the world's toughest problems, such as the nuclear standoff with Iran.

"The fact is, that danger remains," Obama warned in the annual State of the Union address, adding the United States had "to remain vigilant" in face of changing global threats.

"While we have put Al-Qaeda's core leadership on a path to defeat, the threat has evolved, as Al-Qaeda affiliates and other extremists take root in different parts of the world," Obama told US lawmakers, highlighting hotspots like Yemen, Somalia, Iraq and Mali.

"But I strongly believe our leadership and our security cannot depend on our military alone," he said, adding in "a world of complex threats, our security and leadership depends on all elements of our power -- including strong and principled diplomacy."

He warned that as commander-in-chief he would never hesitate to use force when necessary to protect the American people.

"But I will not send our troops into harm's way unless it's truly necessary," he argued, highlighting the drawdown of US troops from Iraq and Afghanistan after more than a decade of war.

"So even as we actively and aggressively pursue terrorist networks, through more targeted efforts and by building the capacity of our foreign partners, America must move off a permanent war footing."

Obama pointed to recent diplomatic successes under Secretary of State John Kerry such as moves to rid Syria of its chemical weapons and the resumption of Middle East peace talks.

And he called on US lawmakers to hold off any new sanctions on Iran for now, to allow time for fledgling negotiations between the Islamic republic and six global powers to work.

In November, Tehran struck an interim deal with the group known as the P5+1 under which Iranian leaders agreed to scale back their uranium enrichment in return for limited sanctions relief.

"It is American diplomacy, backed by pressure, that has halted the progress of Iran's nuclear program - and rolled parts of that program back - for the very first time in a decade," Obama said.

Thanks to the six-month accord, the Islamic republic has begun eliminating its stockpiles of enriched uranium, has agreed to daily inspections and is not installing advanced centrifuges, he said.

Answering criticism from some lawmakers about negotiating with Iran, Obama said the US was "clear-eyed" and any deal would not be based merely on trust but on verifiable actions that the Islamic republic is not seeking a nuclear weapon.

"The sanctions that we put in place helped make this opportunity possible. But let me be clear: if this Congress sends me a new sanctions bill now that threatens to derail these talks, I will veto it.

"For the sake of our national security, we must give diplomacy a chance to succeed," Obama said.

But although he was poised to order military strikes on Syria late last year, the bloody three-year conflict in which some 130,000 people have been killed drew barely a mention in the high-profile national address

Obama said only that his administration would continue to work for a future "the Syrian people deserve -- a future free of dictatorship, terror and fear."

And he sought to draw a veil on past policies saying he has imposed "prudent limits on the use of drones" which have become a hated symbol of US power in some countries.

He also called on Congress to end restrictions on moving prisoners from the US military jail in Guantanamo Bay, Cuba.

"With the Afghan war ending, this needs to be the year Congress lifts the remaining restrictions on detainee transfers and we close the prison at Guantanamo Bay," Obama urged.

In a nod to the spying scandal which has rocked his second term in recent months and angered leaders around the world, Obama said America's "alliance with Europe remains the strongest the world has ever known."

He vowed to continue working with Congress to "reform our surveillance programs, because the vital work of our intelligence community depends on public confidence, here and abroad, that the privacy of ordinary people is not being violated."