President Obama Moves Leon Panetta to Pentagon, David Petraeus to CIA

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If all goes according to plan, according to Pentagon sources, Panetta will be installed at the Pentagon by the end of the summer. Current Defense Secretary Robert Gates, who has served both under President Bush and President Obama, has long made clear he wants to leave the demanding job.

Obama said it is a pivotal time for the country, citing the transition away from two wars that have dominated the United States foreign policy for the better part of a decade.

"In Iraq, we're working to bring the rest of our troops home as Iraqis secure their democracy. In Afghanistan, we're moving into a new phase: transferring responsibility for security to Afghan forces, starting to reduce American forces this summer, and building a long-term partnership with the Afghan people,"

He also pointed to the revolutionary spirit that led to new governments in some countries and protracted armed struggles in others, especially Libya, where American forces are helping to enforce a no-fly zone against Libyan President Moammar Gadhafi.

"As people across the Middle East and North Africa seek to determine their own destiny, we must ensure that America stands with those who seek their universal rights, and that includes continuing to support the international effort to protect the Libyan people," he said.

The staffing changes will come at a pivotal time in particular for the war in Afghanistan, where Petraeus is supposed to start withdrawing troops this summer if he is to stick with the timeline envisioned by President Obama.

Today Petraeus referred to his "guarded optimism about the trajectory of the mission" in Afghanistan.

The plan is for the U.S. to begin pulling out U.S. combat troops from Afghanistan in July, but there has still been no recommendation made by Gen. Petraeus about how many troops should come home.

With Reporting from ABC's Martha Raddatz and Luis Martinez

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