Obama says al Qaeda still greatest threat to U.S

By Caren Bohan

SHANGHAI (Reuters) - President Barack Obama said on Monday that al Qaeda remained the biggest threat to U.S. security, as his aides stepped up pressure on Afghanistan and Pakistan to cooperate with Washington's strategy in the troubled region.

In a sign the pressure was working, Afghanistan later announced it was forming a new anti-corruption unit to fight rampant graft, seen as critical in winning back the people's support in the war against a resurgent Taliban.

Obama, who was visiting Shanghai as part of a nine-day Asian tour, is nearing a decision on whether to send up to 40,000 more troops to fight the eight-year-old war in Afghanistan.

He has faced criticism at home for "dithering" on the Afghan war strategy, and the political pressure has been rising to make a decision soon.

"I continue to believe that the greatest threat to the United States' security are the terrorist networks like al Qaeda," Obama told Chinese students at a town hall meeting in Shanghai.

"They have now moved over the border of Afghanistan and are in Pakistan, but they continue to have networks with other extremist organizations in that region and I do believe it is important for us to stabilise Afghanistan."

One of Obama's top aides had delivered a letter to Pakistani President Asif Ali Zardari urging him to work with the United States against extremists, the New York Times reported on Monday.

In the letter, Obama offered Zardari a range of new incentives to the Pakistanis for their cooperation, including enhanced intelligence sharing and military cooperation, according to the Times, which said the missive was delivered in person by National Security Adviser General James Jones.