Obama stressed that efforts to reverse Bush-era policies such as Guantanamo had begun before he took office as president.

"In 2006, the supreme court invalidated the entire system," Obama said in his speech, delivered at the National Archives in Washington.

In video

 Obama fights to end Bush era national security
 Uighur Guantanamo inmates left in limbo

He noted that roughly 500 detainees had already been released by the Bush administration and criticised Guantanamo and its military tribunals as endangering US citizens, saying they "alienate us in the world and serve as a recruitment tool for terrorists".

"They risk the lives of our troops ... and make it more likely our citizens will be miss-treated if captured in battle," he said.

Senate rebellion

During his campaign for the presidency, Obama pledged to close the camp, but his plans were dealt a blow on Wednesday when the senate voted to block any transfer of prisoners to facilities on the US mainland.

The senate also refused to sanction $80m sought for the shutdown of Guantanamo until Obama decides what to do with the facility's inmates.

A week earlier, the House of Representatives voted against a similar funding bill.

The senate's vote was not the final word on the matter and congress is expected to complete work on the legislation next month, giving the White House time to pursue a compromise.

But if the money is not approved soon, it could be difficult for Obama to meet his January 2010 deadline for decommissioning the prison.

The senate's rejection was particularly stinging as the senate is controlled by Obama's fellow Democrats.

'Partisan rancour'

Legislators rebelled largely over concerns that some of the Guantanamo inmates could be jailed, or even released, in the US and amid Republican threats to brand them as being "soft" on national security.

Obama said that Guantanamo served as a 'recruitment tool' for al-Qaeda [GALLO/GETTY]
Attempting to defuse criticism that closing Guantanamo would endanger national security, Obama said: "We will be ill-served by the fear-mongering that emerges whenever we discuss this issue."

He vowed to work with congress to develop a system for imprisoning detainees who could not be released and conceded that some would end up in US prisons, but insisted that those facilities were tough enough to house even the most dangerous inmates.

"He tried to take the sting out of the partisan rancour that we have seen in Washington over the past few weeks," Al Jazeera's Anand Naidoo, reporting from Washington, said.

"This was a speech not just about national security but also about upholding the law, a speech mainly about respecting American values," he said.

"It was also a very pointed rebuttal of the increasingly vitriolic criticism that has been levelled against him not just by the political opposition but even by his own side, the left wing of the Democratic party, against some of the policies he has adopted."

Security fears

"Members of his [Obama's] own party don't necessarily want to take those prisoners into their states," Todd Kent, a professor of American politics at Texas A&M University, told Al Jazeera.

"So it's forced, really, his hand back to the Bush administration policies."

Kent said that while Obama remained popular with the public, the issue was playing into Republican hands.

"At least on this issue, the American public sees it as more sensible," he said.

"[Dick] Cheney [the Bush-era vice-president] has been arguing that bringing these prisoners into the US, trying them and maybe releasing them would put Americans in danger and that's an area where the Republicans - well, it's their first foothold really since Obama became president."

While most Democrats agree Guantanamo should be closed, the senate vote showed they were demanding a detailed plan before approving funds to launch the process.

In the first days of his administration, Obama won praise for banning harsh interrogation methods such as simulated drowning, known as waterboarding, and for ordering an end to secret CIA jails overseas.

But he has recently made a number of U-turns, blocking the release of photos of alleged detainee abuse and reviving the Bush-era military commissions - that he halted on becoming president - to prosecute suspects held at Guantanamo.