President Obama's seventh and final State of the Union address highlighted what he sees as his biggest accomplishments of his two-term presidency, but also served as a warning to Americans about a looming choice in public life.

"The future we want - opportunity and security for our families; a rising standard of living and a sustainable, peaceful planet for our kids - all that is within our reach. But it will only happen if we work together. It will only happen if we can have rational, constructive debates," the president said. "It will only happen if we fix our politics."

That doesn't mean total agreement, he argued, because having a country full of differing attitudes and interests makes America stronger.

"But democracy does require basic bonds of trust between its citizens," he said. "It doesn't work if we think the people who disagree with us are all motivated by malice, or that our political opponents are unpatriotic. Democracy grinds to a halt without a willingness to compromise; or when even basic facts are contested, and we listen only to those who agree with us."

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He said that changing politics will include ending the practice of gerrymandering congressional districts so that politicians can no longer "pick their voters," reducing the influence of money in politics, and making voting easier.

In a speech that touted his accomplishments and defended his remaining goals, the president said failing to change the tone of politics is one of the "few regrets" of his presidency.

"The rancor and suspicion between the parties has gotten worse instead of better. There's no doubt a president with the gifts of Lincoln or Roosevelt might have better bridged the divide, and I guarantee I'll keep trying to be better so long as I hold this office," said.

Mr. Obama also called on Americans to reject the "voices urging us to fall back into tribes, to scapegoat fellow citizens who don't look like us, or pray like us, or vote like we do, or share the same background."

"We can't afford to go down that path. It won't deliver the economy we want, or the security we want, but most of all, it contradicts everything that makes us the envy of the world," he said.

Though he did not mention Republican presidential candidate Donald Trump by name, the line appeared to serve as a rebuttal to Trump's proposal to temporararily ban on all Muslims entering the U.S. in the wake of the shooting in San Bernardino, California.

South Carolina Gov. Nikki Haley, herself the daughter of Indian immigrants, will offer a similar message when she delivers the official Republican response after Mr. Obama's speech.

The president explained at the beginning of his speech that he would skip the traditional list of requests for Congress and instead focus on the future.

"I know some of you are antsy to get back to Iowa," he joked. "I also understand that because it's an election season, expectations for what we'll achieve this year are low."

He framed the speech around four questions: How to give everyone a fair shot at opportunity and security in the new economy; how to make technology work for, not against people; how to keep America safe without becoming the world's policeman; and how to make politics reflect the best in people.

He lauded economic progress made during his administration, but also blamed outside forces for limiting what he could do in an attempt to blunt Republican arguments that he hasn't done enough.

"Anyone claiming that America's economy is in decline is peddling fiction," Mr. Obama said. "What is true - and the reason that a lot of Americans feel anxious - is that the economy has been changing in profound ways, changes that started long before the Great Recession hit and haven't let up. "

While he lauded broad agreement on education and protecting Social Security and Medicare, he said there is still major disagreement on how active the government should be in "making sure the system's not rigged in favor of the wealthiest and biggest corporations. "

"I believe a thriving private sector is the lifeblood of our economy," Mr. Obama said, but he added "I think there are outdated regulations that need to be changed, and there's red tape that needs to be cut."

"After years of record corporate profits, working families won't get more opportunity or bigger paychecks by letting big banks or big oil or hedge funds make their own rules at the expense of everyone else; or by allowing attacks on collective bargaining to go unanswered," he said.

He also sought to blunt arguments that America's position in the world has become weaker.

"The United States of America is the most powerful nation on Earth. Period. It's not even close," he said. "When it comes to every important international issue, people of the world do not look to Beijing or Moscow to lead - they call us."

The president also sought to realign people's expectations about the threat posed by the Islamic State of Iraq and Syria (ISIS) after terror attacks in Paris and San Bernardino, California.

"As we focus on destroying ISIL, over-the-top claims that this is World War III just play into their hands," he said, using an alternate acronym for the group. "Masses of fighters on the back of pickup trucks and twisted souls plotting in apartments or garages pose an enormous danger to civilians and must be stopped. But they do not threaten our national existence."

He also called on Congress once again to pass a resolution authorizing the use of military force against the group. And in an answer to some of his Republican critics, Mr. Obama said, "Our answer needs to be more than tough talk or calls to carpet bomb civilians. That may work as a TV sound bite, but it doesn't pass muster on the world stage." It was a nod to Texas Sen. Ted Cruz's call to carpet bomb the group during his presidential campaign.

The "smarter approach," Mr. Obama said, is a "patient and disciplined strategy that uses every element of our national power. It says America will always act, alone if necessary, to protect our people and our allies; but on issues of global concern, we will mobilize the world to work with us, and make sure other countries pull their own weight." He repeated a tenet dating back to his 2008 presidential campaign, saying, "We also can't try to take over and rebuild every country that falls into crisis. "

Mr. Obama defended a laundry list of priorities for his final year of the presidency, such as closing Guantanamo Bay, implementing a major climate change agreement and transitioning the economy away from "dirty energy." One of the only new proposals announced in the speech was that Mr. Obama is putting his vice president, Joe Biden, in charge of leading the fight to cure cancer.

The annual address, typically delivered before a joint session of Congress, usually gives the president an opportunity to encourage Congress and the American public to embrace his policy agenda. However, like presidents before him, Mr. Obama is using this address to define his legacy in his own terms and make the case that the next president should build on the work he has done.

The White House has been working hard all week to drum up interest in the speech with interviews, conference calls, and behind-the-scenes video. The address is airing on television in the traditional format, but will also stream on Apple TV, Roku, Amazon Fire TV, Android TV and Xbox One.

The president's speech was interrupted for applause 77 times, including 30 standing ovations mostly by Democrats.