"If this Congress is serious about winning this war, and wants to send a message to our troops and the world, you should finally authorise the use of military force against ISIL," Obama said in his final State of the Union address, using an alternate acronym for the IS.
Addressing a joint session of Congress, Obama admitted that Al-Qaeda and IS pose "a direct threat" to Americans, saying that even a handful of terrorists who place no value on human life can do a lot of damage, Xinhua news agency reported.
However, he stressed that the IS does not "threaten our national existence".
Leading a coalition of more than 60 countries, the US has been fighting against the IS for more than a year, carrying out nearly 10,000 air strikes, he told the lawmakers.
The military action was taken under authorization provided after the September 11, 2001, terrorist attacks.
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In the address, Obama reaffirmed his pledge to destroy the IS, vowing that the group's militants have to be "rooted out, hunted down and destroyed'.