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The Republican president said he was “extending an open hand” to Democrats to work together.
Donald Trump also said he was ordering Guantanamo Bay to be kept open, reversing an Obama-era directive to close the controversial detention camp.
The American economy is booming but President Trump’s approval rating languishes.
He said his administration was “building a safe, strong and proud America”.
President Trump told lawmakers in a one-hour-and-20-minute speech: “There has never been a better time to start living the American dream.”
As many as 40 million TV viewers were expected to tune in as he implored the nation to come together as “one team, one people and one American family”.
President Trump made a plea for the kind of bipartisan co-operation that has been in short supply during a turbulent first year in office.
“Tonight I am extending an open hand to work with members of both parties, Democrats and Republicans, to protect our citizens, of every background, color and creed,” he said.
Donald Trump, who has enraged Democrats by withdrawing protections for immigrants who entered the US illegally as children, offered an olive branch.
However, the president insisted on a border wall with Mexico and other concessions from Democrats as part of any over-arching immigration deal.
Some Democrats booed when President Trump said he wanted to curtail an allowance for legal immigrants to bring family members into the US.
The president again touted his pet plan to rebuild America’s ageing roads and other infrastructure, though he did not offer many details.
He said that 2.4 million jobs had been created on his watch.
Since Donald Trump came to office, the stock market has soared and the unemployment rate is at a 17-year low as the US continues its recovery from the recession of a decade ago.
However, Donald Trump had an average job approval last year of 38%, the lowest first-year rating for any president in the history of Gallup polling.
Massachusetts congressman Joseph Kennedy III, a great-nephew of President John F. Kennedy, delivered the Democratic rebuttal.
Joseph Kennedy III, 37, attempted to seize Donald Trump’s political mantle by purporting to speak for “Americans who feel forgotten and forsaken”.
Bewailing a “fractured country” and depicting the Trump presidency as “chaos”, he said: “Many have spent the past year anxious, angry, afraid.”
“Bullies may land a punch. They might leave a mark. But they have never, not once, in the history of our United States, managed to match the strength and spirit of a people united in defense of their future,” he added.
In one telling moment from President Trump’s speech, members of the Democratic Congressional Black Caucus sat in stony-faced silence amid a standing ovation as the president noted African-American unemployment has hit a record low.
About a dozen Democratic lawmakers said they would boycott President Trump’s speech.
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