Once the euphoria has died down, the mountainous challenges faced by Barack Obama will become all too apparent. "The road ahead will be long. Our climb will be steep," he warned. Here are the obstacles facing America's President Elect.

Once the euphoria has died down from Barack Obama's historic victory, the mountainous challenges he faces will become all too apparent. "The road ahead will be long. Our climb will be steep," he warned. Here are the obstacles facing America's President Elect.

The economy
Six in 10 voters chose this as the most important issue facing America.

The nation is heading into recession with unemployment rising, house prices falling and people defaulting on their mortgage payments.

On the day he was elected, figures showed manufacturing activity in the US plunged to its lowest level for 26 years and October car sales were their lowest for 25 years.

Mr Obama's key priority will be to preserve American jobs and kickstart the economy. He has promised to cut taxes for 95% of Americans but will raise them for households earning more than £158,000 a year.

He also wants to create two million new jobs by rebuilding the US's crumbling infrastructure. Yet with the federal deficit approaching $1tr (£800bn), Mr Obama's ambitious spending plans could well have to be scaled back and he might not be able to deliver on all his tax-cutting and health pledges.

An indication of the hole America faces was that, in spite of Mr Obama's historic victory, the Dow Jones fell around 300 points at one stage yesterday.

Iraq/Afghanistan
Mr Obama, who opposed the war in Iraq, has pledged to get most of the 150,000 American troops out of the country by the middle of 2010 under a "responsible" withdrawal strategy. As with the UK, the plan will be to have a residual force to help with training and to nip in the bud any remaining al Qaeda activity.

But this ambition could be scuppered before it has begun, as the US's main military chiefs have come out against a firm timetable and want withdrawals to be based on security assessments on the ground.

The President Elect's plan is that as troops are scaled down in Iraq, forces are built up in Afghanistan, currently around 30,000. The new commander-in-chief has promised to send two more combat brigades, around 7000 troops, to "finish the fight" against Osama bin Laden.

One key question is whether or not he will continue with the raids to target al Qaeda terrorists, operating just over the border in Pakistan, a policy that has caused much anxiety in Islamabad. Yesterday Hamid Karzai, the Afghan leader, said his first demand of Mr Obama was to "put an end to civilian casualties" following the bombing of a wedding party when 37 people were killed.

Terror
A tough approach to terrorism will be signalled by the Obama administration, but policy is expected to be nuanced and the tone and language used in this area could well change. The phrase "war on terror", a favourite Bushism, could be dropped.

While he has stressed he will "not hesitate to use military force to take out terrorists who pose a direct threat to America", he could instigate a key change by announcing an end to the CIA practice of "waterboarding" as well as closing Guantanamo Bay, with the 200-plus inmates being processed more through the normal legal system.

Iran, the Middle East and Russia
Mr Obama has held out the prospect of direct talks with the leadership in Iran, but recently rode back from engaging with the likes of President Mahmoud Ahmadinejad, saying the real power in Tehran was held by the religious leaders. The President Elect has made clear he would toughen up sanctions to try to halt Iran's nuclear ambitions. However, if Tehran is deemed to be near to attaining nuclear weapons, will Mr Obama sanction a US strike or back an Israeli one?

Yesterday, the Iranian government warned it would respond directly to any violation of its airspace.

George Bush's plan to have a peace plan in place for the Israeli-Palestinian conflict by the year end looks dead in the water, so that the world's most intractable problem will still be in the presidential in-tray.

The first signs of a new Cold War have emerged following the Russian incursion into Georgia. The issues of Georgia and the Ukraine's possible membership of Nato, as well as US anti-missile bases in eastern Europe, have added to a new frostiness between Moscow and Washington.

For much of his outlook, Mr Obama will rely on his seasoned Vice-President Joe Biden, who has a wealth of foreign policy experience.

Healthcare
POLLS showed that more than 80% of Americans want healthcare reform. Some 47 million of them do not have any form of health insurance.

Mr Obama wants to create a National Health Insurance Exchange to help individuals and small businesses buy private insurance, mandatory health insurance for all children and an expansion of Medicaid, the government-run health programme for the poor.

He also wants to spend £30bn to take American health records electronic but he may struggle to find the money to do it.

Even with a Democratic-controlled Congress, Mr Obama will have his work cut out given that it will be wary of spending money on anything, having just given a £400bn stimulus package to the financial industry and with the nation struggling under a £300bn budget deficit.

Climate change
Unlike Mr Bush, who was slow to respond to the threat of global warming, Mr Obama has spoken of a "planet in peril".

He wants an 80% cut in US emissions by the middle of the century, less dependence on foreign oil, the introduction of more electric cars, the creation of thousands of green-coloured jobs and a plan for government buildings to use more renewable power. Yet in an economic downturn, how much of these ambitious plans are realisable?

In his victory speech, Mr Obama told his fellow Americans that they should not expect instant success.

He told the audience in Chicago: "We may not get there in one year or even in one term but, America, I have never been more hopeful than I am tonight that we will get there. I promise you, we as a people, will get there."

The expectations are high and only time will tell whether Mr Obama has the skill, policies, support and good fortune to meet them.