Obama demands fair economy for all in State of Union

In his annual State of the Union address, Obama's best chance for months to directly reach millions of voters, he mostly surveyed domestic issues as he fires up his campaign machine.

But he did touch on several simmering foreign crises - including the deepening nuclear showdown with Iran, which has exposed him to searing charges of weakness from Republican White House hopefuls.

The president, breathing defiance, said the "defining issue" of our time was how to safeguard the basic "American promise" that hard work could provide a decent lifestyle.

And he proposed using the power of government to close the gap between the super rich and the middle classes, laying down a gauntlet to Republicans who charge he stifled the recovery with burdensome regulation.

Obama mounted a staunch defense of his efforts to revive the economy, which will form the central clash of the presidential election.

He touted the creation of more than three million jobs in less than two years, said he had saved the US auto industry and predicted American manufacturing, the engine of the economy, would rise again.

Obama hailed the killing of Osama bin Laden last year by a US special forces team in a daring raid into Pakistan and his promise kept to end the Iraq war as election year proof of his credentials as commander-in-chief.

Among job creation and economic measures, Obama demanded millionaires pay at least 30% tax rates, tapping into public anger at low rates paid by the rich, including his possible Republican election foe Mitt Romney.

Romney on Tuesday reported income of $21.7 million in 2010 from investments and an estimated $20.9 million in 2011 - and in 2010 paid just over $3 million in taxes, or 13.9%.

The president also pledged to keep up pressure on China over intellectual property piracy and promised to new measures to combat fraud in the finance industry and the mortgage sector.

Republicans quickly savaged the speech.

Looking abroad, Obama hailed the demise of Libya's Moammar Gaddafi - implicitly rebutting Republican criticisms that he "led from behind" in the crisis - and warned Syria's Bashar al-Assad his regime's days were numbered.

And he said anyone who said American power was in decline did not know what they were talking about, adding: "America remains the one indispensable nation in world affairs."