"Afghan forces are still not as strong as they need to be. And meanwhile, the Taliban has made gains, particularly in rural areas, and can still deadly launch attacks in cities, including Kabul," Obama said.
"Pressure from Pakistan has resulted in more Al Qaida coming into Afghanistan, and we have seen the emergence of an ISIL presence. The bottom line is, in key areas of the country, the security situation is still very fragile. And in some places there is risk of deterioration," he said.
Obama said he has spoken with Afghanistan President Ashraf Ghani and CEO Dr Abdullah Abdullah on his latest decision, which, he argued is the best possible one for lasting progress in Afghanistan.
He said the American troops would continue with their mission to train Afghan forces in counter-terrorism operations and taking down Al Qaeda until the end of next year.
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Also, he said, "instead of going down to a normal embassy presence in Kabul by the end of 2016, we will maintain 5,500 troops, a small number of bases, including at Bagram, Jalalabad in the east, and Kandahar in the south."
"In this sense, Afghanistan is a key piece of the network of counter-terrorism partnerships that we need from South Asia to Africa, to deal more broadly with terrorist threats quickly and prevent attacks against our homeland," Obama said.
"In Afghanistan, we are part of a 42-nation coalition and our NATO allies and partners can continue to play an indispensable role in helping Afghanistan strengthen its security forces, including respect for human rights," he added.