US president Barack Obama says America will no longer spy on the leaders of its allies and close friends, in a series of reforms triggered by US intelligence leaker Edward Snowden.

In his long-awaited speech, Mr Obama said the changes are designed to better respect the privacy and civil liberties of US citizens.

"The reforms I'm proposing today should give the American people greater confidence that their rights are being protected, even as our intelligence and law enforcement agencies maintain the tools they need to keep us safe," he said.

The National Security Agency (NSA) will no longer be able to hoard so-called telephone "metadata", which details the duration and destination of calls but not their content.

Mr Obama said intelligence agencies will need authority from the Foreign Intelligence Surveillance (FISA) court to check a database of millions of telephone calls unless there is a "true emergency".

But he said bulk data collection will be allowed to continue in order to protect America from terrorists.

"In our rush to respond to a very real and novel set of threats the risk of government overreach, the possibility that we lose some of our core liberties in pursuit of security also become more pronounced," he said.

While the address was designed to fend off concerns that US surveillance has gone too far, Mr Obama's measures were relatively limited.

"The biggest deal is going to the court each time," said retired General Michael Hayden, a former director of both the NSA and the Central Intelligence Agency.

Even as the White House put the final touches on the reform plan this week, media outlets reported that the NSA gathers nearly 200 million text messages a day from around the world and has put software in almost 100,000 computers allowing it to spy on those devices.

Eavesdropping dropped to smooth relations

Mr Obama's promise to stop eavesdropping on the heads of state or government of close US allies is designed to smooth over frayed relations with several countries.

Last year, reports surfaced that the NSA had monitored the mobile phone of German chancellor Angela Merkel and Brazilian president Dilma Rousseff.

"The leaders of our close friends and allies deserve to know that if I want to learn what they think about an issue, I will pick up the phone and call them, rather than turning to surveillance," Mr Obama said.

Still, he said, US intelligence will continue to gather information about the intentions of other governments and will not apologise simply because US spy services are more effective.

Mr Obama asked US attorney-general Eric Holder and the intelligence community to report back to him, before the metadata program comes up for reauthorisation on March 28, on how to preserve the necessary capabilities of the program, without the government holding the metadata.

Obama's reforms 'embarrassing', 'meaningless': Julian Assange

WikiLeaks founder Julian Assange has dismissed Mr Obama's proposals to curb the reach of the NSA, saying they would change very little.

Assange described Mr Obama's speech as "embarrassing" and said the proposals would have little effect, in an interview with CNN.

Assange says Mr Obama reforms are largely meaningless. ( Getty Images: Peter Macdiarmid, file photo )

He said Mr Obama had been "dragged, kicking and screaming" to make the changes, because of revelations from Snowden and other intelligence leakers before him.

"It's embarrassing for a head of state to go on like that for 45 minutes and say almost nothing," he said.

"He is being very reluctant to make any concrete reforms. And unfortunately today we also see very few concrete reforms."

Assange was sceptical that a move obliging NSA agents to seek endorsement from the FISA, before accessing data on a specific target would be effective.

"The FISA court ... is known to be the most secret captive court in the United States that's producing secret judge-made law," Assange said.

He also said the appointment of a public advocate to sit on the FISA court was "unlikely to produce a decent result."

A pledge not to spy on friendly world leaders was also meaningless, Assange said.

"[Obama is saying] we're not going to spy on [German chancellor] Angela Merkel or [British prime minister] David Cameron. Or the Australian prime minister. Sure. But let me just spy on everyone else they talk to," he said.

"It doesn't mean anything to not spy on world leaders."

Assange has been holed up in the Ecuadoran embassy in London since 2012, where he is fighting extradition to Sweden.

ABC/wires