President Barack Obama marked the second anniversary of the end of the US combat mission in Iraq by calling Saturday for "nation-building" back in the United States as it battles a slumping economy.

The president declared an end to US combat operations in Iraq on August 31, 2010 after a seven-year war. All US forces returned home at the end of last year.

"As we turn the page on a decade of war, it's time to do some nation-building here at home," Obama said in his weekly address.

He praised the skills, discipline and leadership of American veterans, and vowed to better reward them for their service through improved access to jobs and housing.

"No one who fights for this country should have to fight for a job or a roof over their head when they come home," he said.

"It's time to build a nation that lives up to the ideals that so many Americans have fought for -- a nation where they can realize the dream they sacrificed to protect."

The president called for putting veterans back to work by rebuilding the country's aging infrastructure and electrical grid, as well as by boosting the ranks of police and firefighters.

The president made his political name opposing the Iraq war even before he was elected to the Senate in 2004, and regards bringing US troops home as the fulfillment of one of his core political promises.

His decision will feature prominently next week in three days of speeches and events culminating in his acceptance of the Democratic Party nomination as he seeks a second term in the White House in November.

Polls show that Obama's foreign policy performance is one of his strongest credentials as he asks voters for re-election, even as Republicans accuse him of weakness abroad and of presiding over an erosion of US power.

On Friday, Obama told soldiers headed for Afghanistan that they still faced a "very tough fight" but pledged to end the war as "responsibly" as he halted conflict in Iraq.

The Afghan government is set to take the lead for securing the country next year under a transition designed to ultimately hand over responsibility for the country's security to Afghan forces in 2014.

"But as long as we have a single American in harm's way, we will continue to do everything in our power to keep them safe and help them succeed," the president said in his address.

In a Republican response, Representative Steve Scalise of Louisiana urged the president not to allow the expiration of tax cuts adopted under former president George W. Bush.

The tax breaks are set to expire on January 1. But Democrats and Republicans strongly disagree over how to extend them.

While Obama favors higher taxes for the rich, the Republicans argue it would undercut the nation's fragile economic recovery.

Scalise warned that such a tax hike would kill over 700,000 jobs.

"That's a blow our small businesses just can't afford to take," he said.