His words brought with them a strategy that's been largely welcomed in officialdom here. In particular, two key parts.
The first is setting up of what's been dubbed the "National Guard" to protect towns and cities across Baghdad. This isn't new.
In 2006 when the sectarian violence was at its height in Iraq the American occupiers funded and trained Sunni groups to battle against al-Qaeda forces.
They were successful and al-Qaeda in Iraq was defeated. But then the Americans abandoned them.
That's one of the reasons Islamic State have been able to return.
These national guard units are key, if the Sunni groups can trust the Americans to support them fully and not abandon them once the job is done.
Zebari's position
Air strikes and air support has also been welcomed here. By using American air power alongside Iraq army ground troops, Obama may hand the Iraqis the advantage in beating the Islamic State.
Hoshyar Zebari, Iraqi deputy prime minister, says the strategy, in particular US air support, is crucial.
"We welcome the announcement of the new strategy which President Obama announced last night to face up to ISIS and it's threat not only to the security of Iraq of Syria and the region but the entire world," he told Al Jazeera.
"I believe that this a bold strategy, it will work and definitely we will see an engagement without ground troops and I think from what we have seen with the peshmerga forces and some Iraqi forces that the airstrikes are working and the fighting is being done by Iraqi's themselves."
So far so good. But Syria remains an unknown quantity. Obama was clear that Syria was part of the solution but was less than opaque on what that might mean.
He didn't promise to hit targets in the country, instead saying he would go after the group wherever they posed a threat. This has been met with concern by Iraqis who would rather Obama gave a much fuller idea of what action in Syria might mean.
On Wednesday Haider al-Abbadi, the Iraqi prime minister, said that "Iraq couldn't go into Syria but the Americans could", which is an indication that the Iraqis consider action in Syria key to defeating the Islamic state.
Question of ideology
Also as part of this strategy the US is putting together a coalition of Arab states and others to help in the fight and this helps them give cover and allows them to talk of the Islamic State as a wider problem that the region must face together. That has another impact though - one of ideology.
John Kerry, US secretary of state, spoke at length in Baghdad on Wednesday and in particular one thing stood out.
He said: "Countries particularly in the Muslim world, can join together in defining the real Islam and making it clear that there is no legitimacy whatsoever within ISIL for any of the claims that they make with respect to a religious foundation for their Caliphate, their state, or for their actions. It is necessary for moderate, reasonable people around the world to repudiate the distortion of Islam that ISIL seeks to spread."
With those words this US administration has declared that beating the Islamic State requires not just military but an ideological battle. But can America lead the ideological charge and help reshape what Islam means globally?
Salman Shaikh, director of the Brookings Doha Centre think tank, says: "One can understand western leaders trying to segregate radical ideology from the rest of Islam but this is fraught. Unless you have Arab and Muslim leaders who want to go down such a route it's better to build on the coalition of countries they're putting together to fight IS and what can be achieved there rather than trying to separate 'bad' Islam from 'good' Islam. The strategy should focus on IS crimes and human right violations which is something everyone can get behind."
'Wide open borders'
Not everyone is on board with the new strategy to defeat the Islamic state, however.
Wathak al-Hashimi, a political writer and head of the of the Iraqi Group for Strategic Studies, told me: "The speech wasn't so optimistic for Iraqis and the countries that suffer from terrorism. Obama won his election by promising to pull out of Iraq and so his desire to re-engage is limited.
"The idea of using air strikes and drones won't have an impact on the ground. IS forces will just regroup in other countries that neighbour Iraq because of our wide open borders.
"The Iraqi government has a red line: no boots on the ground. When your enemy hides itself in civilian population, how do you attack them without civilian casualties?
"Iraq needs a more thorough strategy. This isn't enough."
A more thorough strategy, however, may mean putting American boots on Iraqi ground and that would only give the Islamic State a rallying call that would encourage self-proclaimed jihadists from all over the world to come to Iraq and fight Americans, risking further escalation.
Islamic State's perspective
President Obama is well aware of this and this is why he is hoping that a limited engagement and plan is enough to defeat Islamic State.
There's very little appetite among Americans both within government and outside to see US soldiers return here.
For the Islamic State, Washington's plans are irrelevant.
Through social media one alleged member of its group told me: "Remember. We haven't declared war on America, the beheadings were just a message, blood for blood, soul for soul. Obama is a proxy warrior."
The Islamic State insists that God is on its side and that the "caliphate" will survive and expand, despite what the US and the coalition of Arab states has put together, thinks otherwise.
It is a view that is Illustrated by this message an Islamic State supporter sent out via the social media site Twitter: "Oh Allah, when the world turned against us, we turned to you."
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