"As your leader, I will ensure that our nation continues to have the best-trained, best-equipped, and strongest military in the world a force prepared to confront the challenges that face us," Panetta wrote in his first message to troops after taking the oath of office at the Pentagon.

"Even as the United States addresses fiscal challenges at home, there will be no hollow force on my watch," Panetta said.

"That will require us all to be disciplined in how we manage taxpayer resources," he said.

Panetta pulled up in a motorcade for his first day on the job a little behind schedule, at 8:38 am local time (12:38 GMT), about eight minutes late.

He walked to the Pentagon's entrance alone with no aides at his side, carrying a satchel.

On the steps of the building, Panetta was greeted by a Marine officer who will serve as his senior military assistant, Lieutenant General John Kelly, whose son was killed last year in southern Afghanistan.

"Welcome aboard sir," said Kelly, shaking his hand.

Officials said Panetta was sworn as the 23rd defence secretary at 8:48 am, succeeding Robert Gates who won praise from both parties during his four-and-a-half years on the job.

Panetta assumes office amid mounting calls to rein in government spending, with an increasing number of lawmakers saying the massive defence budget can no longer be excluded from cutbacks.

Acknowledging "tough budget choices" on the horizon, Panetta said: "We must preserve the excellence and superiority of our military while looking for ways to identify savings."

In his statement, Panetta also addressed the war in Afghanistan that has dragged on for nearly 10 years and the withdrawal of the remaining American troops from Iraq set for this year, describing a "transition" in both countries.

"Our nation is at war. We must prevail against our enemies," Panetta said.

With a gradual transfer to Afghan forces due to begin this year, Panetta said the United States "must remain committed to working closely with our Afghan and international partners to ensure that it never again becomes a safe haven for Al Qaeda and its militant allies."

On Iraq, he said the United States will need "to reinforce that responsibility for the future security of Iraq must belong to the Iraqis themselves."

Panetta, however, made no mention of the NATO-led air war in Libya. The US military is mainly providing aerial refuelling tankers, surveillance aircraft and unmanned Predator planes in the campaign.

The 73-year-old Panetta, who stepped down from the CIA to take the Pentagon job, is older than any of his predecessors when they started their time in office.

Officials said Panetta and his wife would have lunch with the US military's top officer, Admiral Mike Mullen, and his spouse Friday before meeting the chiefs of the armed services in "the tank," where top brass have deliberated over crises and wars for decades.

Copyright AFP (Agence France-Presse), 2011