"I will end 'don't ask-don't tell,"' Obama said to a standing ovation from the crowd of about 3,000 at the annual dinner of the Human Rights Campaign, a gay civil rights advocacy group.
The law was passed by Congress in 1993 and signed by President Bill Clinton, who also promised to repeal the ban on homosexuals in the military but was blunted by opposition in the military and Congress. Obama said he's working with Pentagon and congressional leaders on ending the policy.
"We should not be punishing patriotic Americans who have stepped forward to serve the country," Obama said. "We should be celebrating their willingness to step forward and show such courage ... especially when we are fighting two wars."
Obama said it was no secret "our progress may be taking longer than we like." He followed this by asking supporters to trust his administration's course.
"I appreciate that many of you don't believe progress has come fast enough," Obama said. "Do not doubt the direction we are heading and the destination we will reach."
Some advocates said they already have heard Obama's promises - they just want to hear a timeline. Cleve Jones, a pioneer activist and creator of the AIDS Memorial Quilt, said Obama delivered a brilliant speech, but added "it lacked the answer to our most pressing question, which is when."
"He repeated his promises that he's made to us before, but he did not indicate when he would accomplish these goals and we've been waiting for a while now," said Jones, national co-chair of a major gay-rights rally expected to draw thousands of gay and lesbian activists to the National Mall on Sunday.
Obama also called on Congress to repeal the Defense Of Marriage Act, which limits how state, local and federal bodies can recognize partnerships and determine benefits. He also called for a law to extend benefits to domestic partners.
He expressed strong support for the Human Rights Campaign agenda - ending discrimination against gays, lesbians, bisexuals and transgender people - but stopped short of laying out a detailed plan for how to get there.
"My expectation is that when you look back on these years you will look back and see a time when we put a stop against discrimination ... whether in the office or the battlefield," Obama said.
Obama's political energies are focused on managing two wars, the economic crisis and his attempt to reform the health care system.
His message Saturday was one of unity and support for a group that has funneled large amounts of money into Democratic coffers.
"I'm here with a simple message: I'm here with you in that fight," Obama said.
Obama also addressed those who do not favor advancing gay rights. A recent Pew Research Center poll asked about homosexual behavior, and about half said it is morally wrong. "There's still laws to change and there's still hearts to open," Obama said.
Since Obama took office in January, some advocates have complained that Obama has not followed through on promises on issues they hold dear and has not championed their causes from the White House, including ending the ban on gays serving openly in the military and pushing tough nondiscrimination policies.
Richard Socarides, who advised Clinton's administration on gay and lesbian policy, said Obama delivered "a strong speech in tone, although only vaguely reassuring in content."
"The president and Nobel winner came and paid his respects, but tomorrow many will ask: What's his plan, what's his timetable?" In the past, Obama has urged the gay-rights community to trust him. In June, he pointed to some initial efforts, such as a presidential memorandum he issued that expands some federal benefits to same-sex partners.
Obama publicly has previously committed himself to repealing the "don't ask, don't tell" policy that allows gays and lesbians to serve in the military as long as they don't disclose their sexual orientation or act on it. But Obama hasn't taken any concrete steps urging Congress to rescind the policy, and his national security adviser last weekend would only say that Obama will focus on overturning it "at the right time."
Obama also pledged during the campaign to work for repeal of the Defense of Marriage Act. But lawyers in his administration defended the law in a court brief. White House aides said they were only doing their jobs to back a law that was already on the books.
The gay community is somewhat split as to whether Obama should be expected to produce results right away.
The Human Rights Campaign, which invited Obama to speak at its dinner Saturday night, holds out hope of seeing more action. "We have never had a stronger ally in the White House. Never," Joe Solmonese, the group's president, said at the dinner before Obama spoke. In an interview, he said the Obama administration has been working with the group on a range of issues "on an almost weekly and sometimes daily basis."
Obama noted new hate-crimes legislation, which would make it a federal crime to assault people because of their sexual orientation. Approved by the House this week, Obama predicted it would pass the Senate and promised to sign it into law.