*President Barack Obama pushed job creation to the top of his agenda and vowed not to abandon his struggling healthcare overhaul after a political setback that raised doubts about his leadership.

With the economy still weak and unemployment at a painful 10 percent, “Jobs must be our number one focus in 2010,” Obama told Congress in his annual State of the Union address on Wednesday.

Obama, who inherited a financial crisis and wars in Iraq and Afghanistan from the Bush administration, admitted he had made mistakes and that his first year in office had been a difficult one.

But he promised not to give up in his efforts to change the way that Washington works and push through his ambitious agenda for financial reforms, healthcare, energy and climate change, even though many Democrats fear losing their seats in November congressional elections.

“We don’t quit. I don’t quit,” he told Congress, split largely along Republican and Democratic lines over Obama’s policies. “Let’s seize this moment — to start anew, to carry the dream forward and to strengthen our union once more.”

He pledged tough new rules for Wall Street but said he was “not interested in punishing banks,” comments that helped boost U.S. stock futures by appearing to retreat slightly from some of his fiery rhetoric.

Obama said he would work to dig the country out of a “massive fiscal hole” and was willing to use his veto power to enforce budgetary discipline.

The U.S. deficit — a record $1.4 trillion in 2009 or almost 10 percent of gross domestic product — is forecast by the Congressional Budget Office to fall slightly this year to $1.35 trillion.

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