Obama and Cameron in No 10 talks

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President Obama is expected to address both Houses of Parliament later in the day

Barack Obama has held talks with David Cameron in Downing Street in which the conflicts in Afghanistan and Libya were expected to feature prominently.

The US President will later make a key foreign policy speech to MPs and peers on the second day of his state visit.

He is expected to focus on recent developments in the Middle East and the nature of the US-UK relationship.

The two leaders are now attending a barbecue hosted by their wives for families of military personnel.

The Nato operation in Libya and ongoing tensions in the Middle East and north Africa were expected to be high on the agenda at the bilateral talks – which lasted about 90 minutes.

Westminster speech

Deputy Prime Minister Nick Clegg, Foreign Secretary William Hague and US counterpart Hillary Clinton also attended the meeting, where the state of the global economy, counter-terrorism and the conflict in Afghanistan are also likely to feature.

After attending a barbecue in the garden of No 10 Downing Street for UK and US servicemen and women – hosted by First Lady Michelle Obama and Samantha Cameron – the two men will hold a joint press conference.

Later in the day, Mr Obama will give a setpiece speech on US foreign policy at Westminster Hall – the oldest building within the Palace of Westminster – an honour usually reserved for British monarchs.

The hall has seen speeches from a number of heads of state – most recently Pope Benedict XVI in 2010 – but Mr Obama will be the first US president to give an address there to both Houses of Parliament.

During what has been described as an “upbeat and optimistic” address, Mr Obama is expected to say that the US has no closer ally in the world than the UK.

‘Looking to allies’

Ahead of the talks, Mr Hague said there were “no fundamental differences” between the two countries on key foreign policy issues and President Obama’s visit would bring “intensified co-operation” on different levels.

He insisted London was happy with the US contribution to military operations in Libya – despite reports to the contrary – stressing US aircraft had accounted for a quarter of missions and were also providing key logistical and intelligence support.

“We do not regard the US as taking a back seat (in Libya),” he told BBC Breakfast.

“They do look to their allies to do a great deal as well which France, the UK and other nations are doing but I don’t think one can fault that,” adding the discussions would focus on “intensifying” pressure on the Gaddafi regime.

On Afghanistan, where both countries are looking to gradually reduce the number of troops there – Mr Hague said the allies were “both committed to the military and political efforts” to bring long-term stability.

The BBC News Channel’s Chief Political Correspondent Laura Kuenssberg said that while the two men would put on an united front on Libya there were underlying tensions between the two countries about how far they should go to break the apparent deadlock on the ground.

School visit

While the president gives his speech, his wife Michelle will travel to Oxford University where she will host an open day for pupils from the Elizabeth Garrett Anderson School in north London.

The visit is designed to encourage them to apply for further education.

In the evening, the Obamas will give a dinner at the US ambassador’s residence, Winfield House, for guests including the Queen and the Duke of Edinburgh.

On Thursday, Mr Obama and Mr Cameron will fly to France for the G8 summit of leading industrialised nations in Deauville.

At a banquet given in his honour by The Queen on Tuesday, President Obama thanked the UK for its solidarity since the 9/11 attacks 10 years ago and in tackling the security threats that have followed.

He also met Labour leader Ed Miliband at Buckingham Palace.

Shadow Foreign Secretary Douglas Alexander, who was also present at the meeting, said the two men had discussed the “common challenges” facing the two countries, stressing that President Obama was “deeply committed” to advancing the US-UK relationship.