Obama said after combat mission ends in Iraq, U.S. military effort in that country will change to support. He said a transitional force will be maintained until all U.S. troops are pulled out of Iraq by the end of next year. The transitional force will focus on supporting and training Iraqi forces, partnering in counterterrorism, and protecting U.S. civilian and military efforts.

"Make no mistake, our commitment in Iraq is changing -- from a military effort led by our troops to a civilian effort led by our diplomats," said the president.

As U.S. troops pull out of Iraq, violent attacks such as car bombings again spiked in Baghdad and elsewhere, as Iraqi government figures showed July as the deadliest month for Iraqis in more than two years. Meanwhile, Iraqi politics are at an impasse, with factions unable to form a government, months after the May 7 parliamentary polls, raising questions over political stability and security after U.S. troops' pullout.

Admitting that "terrorists try to derail Iraq's progress," Obama defended the preparedness of Iraqi forces and government, saying violence in Iraq is "near the lowest it's been in years."

Overall violence in Iraq has dropped sharply since the height of sectarian warfare in 2006-2007, but the latest polls and the imminent U.S. drawdown fueled a new wave of bloodshed.

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