Afghan forces are due to take over all security operations by 2014
The US has about 100,000 troops in Afghanistan and Mr Obama has said troop withdrawals will start in July.
But there are deep divisions in the US over the size and speed of the pullout.
News of Mr Obama's deliberations comes a day after departing US Defence Secretary Robert Gates confirmed that the US was holding "outreach" talks with members of the Taliban in Afghanistan.
It was the first time the US had acknowledged such contact.
'Gains could be threatened' Mr Obama is expected to make a public speech on Afghanistan on Wednesday, unnamed senior White House officials told US media.
US military leaders are thought to favour a very gradual reduction in troops but other advisers advocate a more significant decrease in the coming months.
Attention is expected to focus on how many troops will leave Afghanistan in July, but analysts say Mr Obama's plans for the future of the 30,000 surge forces he sent in 2009 in the country will also be closely scrutinised.
Earlier this month, Mr Gates said at Nato headquarters that "substantial progress" was being made on the ground in Afghanistan.
But he argued that "these gains could be threatened if we do not proceed with the transition to Afghan security lead in a deliberate, organised and co-ordinated manner".
"Even as the United States begins to draw down in the next month, I assured my fellow ministers there will be no rush to the exits on our part."
But some believe security gains mean a more rapid withdrawal of US forces is practical.
'Costs outweigh benefits' There is also growing political pressure for a significant withdrawal.
A bipartisan group of 27 US senators sent Mr Obama a letter last week pressing for a shift in strategy.
"Given our successes, it is the right moment to initiate a sizable and sustained reduction in forces, with the goal of steadily redeploying all regular combat troops," the senators wrote. "The costs of prolonging the war far outweigh the benefits."
While many Afghans accept that American troops are needed to defeat the Taliban, correspondents say that they resent their presence in the country.
The war is in its 10th year, civilian casualties are at an all-time high, and correspondents say the population has grown weary of the fighting. Insurgents are to blame for most of the deaths, but killings by foreign troops generate widespread outrage.
The US is due to start withdrawing its 97,000 troops from Afghanistan in July.
It aims to gradually hand over all security operations to Afghan security forces by 2014.
US President Barack Obama is close to a decision on the size of his planned withdrawal of US troops from Afghanistan and is expected to speak on the issue on Wednesday.
"He's finalising his decision. He's reviewing his options," White House spokesman Jay Carney said.The US has about 100,000 troops in Afghanistan and Mr Obama has said troop withdrawals will start in July.
But there are deep divisions in the US over the size and speed of the pullout.
News of Mr Obama's deliberations comes a day after departing US Defence Secretary Robert Gates confirmed that the US was holding "outreach" talks with members of the Taliban in Afghanistan.
It was the first time the US had acknowledged such contact.
'Gains could be threatened' Mr Obama is expected to make a public speech on Afghanistan on Wednesday, unnamed senior White House officials told US media.
US military leaders are thought to favour a very gradual reduction in troops but other advisers advocate a more significant decrease in the coming months.
Attention is expected to focus on how many troops will leave Afghanistan in July, but analysts say Mr Obama's plans for the future of the 30,000 surge forces he sent in 2009 in the country will also be closely scrutinised.
Earlier this month, Mr Gates said at Nato headquarters that "substantial progress" was being made on the ground in Afghanistan.
But he argued that "these gains could be threatened if we do not proceed with the transition to Afghan security lead in a deliberate, organised and co-ordinated manner".
"Even as the United States begins to draw down in the next month, I assured my fellow ministers there will be no rush to the exits on our part."
But some believe security gains mean a more rapid withdrawal of US forces is practical.
'Costs outweigh benefits' There is also growing political pressure for a significant withdrawal.
A bipartisan group of 27 US senators sent Mr Obama a letter last week pressing for a shift in strategy.
"Given our successes, it is the right moment to initiate a sizable and sustained reduction in forces, with the goal of steadily redeploying all regular combat troops," the senators wrote. "The costs of prolonging the war far outweigh the benefits."
While many Afghans accept that American troops are needed to defeat the Taliban, correspondents say that they resent their presence in the country.
The war is in its 10th year, civilian casualties are at an all-time high, and correspondents say the population has grown weary of the fighting. Insurgents are to blame for most of the deaths, but killings by foreign troops generate widespread outrage.
The US is due to start withdrawing its 97,000 troops from Afghanistan in July.
It aims to gradually hand over all security operations to Afghan security forces by 2014.
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