U.S. President Barack Obama used his inauguration Monday to call for unity amongst Americans in order to resolve the financial woes and political divides with which the country continues to struggle.

Speaking to the hundreds of thousands who converged on Washington to watch Obama embark on his second term in the White House, the president stressed that decisions must be made that the United States “cannot afford to delay.”

Acknowledging the political divide that has stalled policy makers in acting on such wide-ranging issues as financial reforms, gun control and climate change, Obama said: “Progress does not compel us to settle centuries-long debates about the role of government for all time – but it does require us to act in our time.”

He continued: “We cannot mistake absolutism for principle, or substitute spectacle for politics, or treat name-calling as reasoned debate,” he said.

The president used the inaugural address to also touch upon such topics as gay rights and immigration reform, topics that are expected to set the stage for pending policy fights.   

Obama also stressed the importance of maintaining a strong middle class by supporting social and healthcare programs.

“These things do not sap our initiative, they strengthen us,” he said. “They do not make us a nation of takers, they free us to take the risks that make this country great.” 

The president noted that Americans have been “tested by crises” that have made the country more resilient.

“A decade of war is now ending.  An economic recovery has begun.  America’s possibilities are limitless, for we possess all the qualities that this world without boundaries demands:  youth and drive, diversity and openness, an endless capacity for risk and a gift for reinvention."

An estimated crowd of up to 800,000 gathered in Washington to witness the event, along with millions of TV viewers worldwide.

James Taylor, Kelly Clarkson took to the stage during the event and Beyoncé performed a powerful rendition of the American national anthem. 

The turnout is a fraction of the size of the crowd that was seen four years ago, when a record-breaking 1.8 million packed into central Washington to watch history in the making.

Taking to Twitter on Monday morning, Obama expressed his desire to press on with the work started in his first presidential term. "I'm honored and grateful that we have a chance to finish what we started. Our work begins today. Let's go," he wrote ahead of the official inauguration ceremony.

Sen. Charles Schumer, chairman of the inauguration ceremony committee, kicked off the event by addressing the theme of the 2012 inauguration: “Faith in America’s Future.”

Referencing the challenges the U.S. faces, Schumer said: “When thoughts like these produce anxiety, fear and even despair, we do well to remember that Americans have always been and still are a practical, optimistic, problem-solving people. And that as history shows, no matter how difficult the problems, how half-finished the task, America always rises to the occasion, America prevails and America prospers.”

The president, First Lady Michelle Obama and daughters Sasha and Malia began the day Monday with a service at St. John's Episcopal church. The swearing-in ceremony took place on the steps of the U.S. Capitol shortly after 11 a.m., followed by Obama’s inaugural address.

The public ceremony caps a three-day long celebration in Washington to mark the commencement of Obama’s second term.

Inauguration-goers were screened at security checkpoints Monday. A number of items are prohibited in the area, including glass containers, large signs and bicycles.

Prime Minister Stephen Harper offered his congratulations to Obama on Monday, noting that the two have worked closely together over the last four years.

“The long-standing partnership between our two countries is defined by so many commonalities. We share the world's largest trading relationship, the world’s longest undefended border, and a deep mutual commitment to promoting freedom, human rights and the rule of law around the world,” Harper said in a statement.

Speaking from Washington, Foreign Affairs Minister John Baird described the relationship between Prime Minister Stephen Harper and Obama as “strong.”

“I think it’s professional, I think it’s obvious they have a good personal rapport and I think they’ve been able to use that relationship in a way to make things happen,” Baird told CTV News Channel.

Baird noted that the ongoing U.S. financial crisis and a decision on the Keystone XL pipeline will have a noticeable impact north of the border over the next four years.  

Heading into his second term, Obama faces a number of challenges, both domestic and abroad.

Most pressing is the country’s economic problems. The president has been tasked with guiding Congress beyond the fiscal cliff, debt ceiling and budget divisions.

Abroad, he must contend with Israeli-Palestinian tensions over settlement building, while pressure mounts to take action on Iran’s nuclear facilities.

Spurred by the school massacre in Newtown, Conn., Obama is also seeking gun control reforms, but his proposals are seeing heavy pushback from Republicans and gun lobbyists.

Obama may also look to put comprehensive immigration reform back on the agenda, something he promised in his first term in office.