President Clinton has given a strong warning to Iraq that time is running out and military action will have to be taken if it continues to obstruct the work of UN arms inspectors. If necessary, the US will take unilateral action.
Republicans who have been urging Mr Clinton to take military action against Iraq applauded.
The warning, delivered as part of the State of the Union address to Congress, follows a report in the New York Times that Mr Richard Butler, head of the inspection team, says that Iraq has the capacity to "blow away Tel Aviv" with biological weapons carried by missiles.
The President also called on Congress to ratify the expansion of NATO and appealed for it to authorise increased US funding for the International Monetary Fund to allow it help Asian economies weather the present crisis. The President also urged Congress to approve funds to begin paying the US back-dues to the United Nations.
Mr Clinton's televised address was watched from the distinguished visitors' gallery by Mrs Clinton and friends. There was huge interest in advance as the country wondered whether the President would use it to address the crisis over the allegations of Ms Monica Lewinsky.
But most of his speech was devoted to his proposals for domestic policies in the areas of balancing the budget, education, health, childcare, social security, increasing the minimum wage and protecting the environment.
In education, which is mainly the responsibility of the states, the President is proposing $12 billion in federal funding, targeted in particular at poorer inner city areas.
One of the most expensive proposals is $22 billion in improved childcare facilities for working parents, an area especially prized by Mrs Clinton. Under health, there is a proposal to allow Medicare benefits to people under 65 for the first time. The age would be lowered to 55 for those who lose their jobs and their health insurance.
The Peace Corps programme which was begun by President Kennedy is to be expanded to 10,000 volunteers from its present 6,500. There is also to be increased funding on food safety and inspection, a topical subject as the defamation action against talk show host Oprah Winfrey over her comments on hamburgers continues in an Amarillo court.
A $5 billion package of tax breaks and grants is proposed to encourage businesses to use clean energy technologies. A more controversial idea is using future budget surpluses to shore up the social security pensions system, which is expected to go bankrupt in less than a decade.
Most of the proposals will need the support of the Republicans to pass Congress. In a mid-term election year, they will be reluctant to oppose the more popular proposals of the President.
President Clinton won a nomination for the 1998 Nobel Peace Prize yesterday.
Three far-right members of the Norwegian parliament said they were naming Mr Clinton for helping bolster democracy, human rights and peace in nations like former Yugoslavia.
"Whatever problems Clinton has in the United States, you have to admit that in foreign policy he's done a great job," said Mr Vidar Kleppe, deputy leader of the Progress Party, who was one of the three who nominated the President.
Additional reporting: Reuters