Barack Obama and David Cameron say there is "progress" in Libya and Afghanistan and the UK-US relationship is "essential", as a Channel 4 News/You Gov poll shows the President is a hit with the Brits.
Speaking at a joint press conference, the Prime Minister stressed the historical links between the two nations.
A Channel 4 News/You Gov poll shows that Brits love Obama as much as they hated Bush.
Read more on Obama mania here.
He said: "That is what makes the relationship special. But what makes it essential is that it is not just about history or sentiment.
"It is a living, working partnership and it is essential to our security and it is essential to our prosperity."
President Obama said the relationship between the UK and the US, based on "shared ideals and shared values", was stronger than it had ever been.
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The leaders discussed the "progress" made in conflicts in Afghanistan and Libya as well as peace in the Middle East.
David Cameron said the US operation against Osama bin Laden represented a "strike right at the heart of international terrorism".Mr Cameron said the next 12 months represented a "vital year" in Afghanistan, while British and American troops had "broken the momentum of the insurgency" in the country.
He added: "The Taliban must make a decisive split from al-Qaeda, give up violence and join a political process that will bring lasting peace to that country.
"We are agreed to give this the highest priority in the months ahead."
President Obama said "great progress" had been made in Libya but he once again ruled out "boots on the ground".
He said air strikes would continue against targets in Libya until Colonel Gaddafi left the country to its people.
Mr Cameron did not confirm that British Apache helicopters are set to join the NATO campaign.
He said: "The President and I agree that we should be turning up the heat in Libya. I believe the pressure is on the regime. You can see it in the fact that the rebels have successfully liberated much of Misrata."
The Prime Minister added: "I believe we should be turning up the pressure and on Britain's part we will be looking at all the options for turning up that pressure, obviously within the terms of UN resolution 1973."
The deficit reduction
David Cameron has always insisted on the need to stick to his Government's deficit reduction plan but Mr Obama said he would be prepared to deviate from his administration's original ideas if they did not work.
He said: "The other point I think that David and I would agree on is that this is going to be a constant process of trying some things, making adjustments.
"There are going to be opportunities for us to make investments, there are going to be areas where we thought those were good ideas at the time, programmes that were started with the best of intentions and it turns out they were not working as well as they should.
"If it's not working well, we should get rid of it and put that money into programmes that are working well. It means we have got to make sure we take a balanced approach and there's a mix of cuts and also thinking of how we generate revenue so there is a match between money going out and money coming in."
Mr Obama said every country was going to have to go through the "difficult and painful process" of deficit reduction, but said "we are going to be able to come out of this stronger than we were before".
Governments needed to be "reflective" of people's values when it came to public spending.