President George W Bush has described as "pretty dramatic" the recovery made in New Orleans since Hurricane Katrina devastated the Gulf Coast last August.
New Orleans currently has about a fifth of its pre-Katrina population
Making his first visit in three months, Mr Bush said New Orleans now reminded him of the city he used to visit, and pledged continued federal support.
It comes amid anger from some residents over proposals to rebuild the city.
They are upset by a recommended four-month moratorium on rebuilding homes in some affected districts.
The freeze was among proposals made by the Bring New Orleans Back (BNOB) commission, set up by Mayor Ray Nagin.
The commission, which has spent three months assessing the city's future, made some of its suggestions public on Wednesday.
Restoring the Louisiana city to its former glory may prove to be the costliest rebuilding programme in US history.
Speaking in New Orleans on Thursday, Mr Bush hailed the progress made since his last visit in October.
"I will tell you, the contrast between when I was last here and today is pretty dramatic," he said.
"From when I first came here to today, New Orleans is reminding me of the city I used to visit."
The president, who praised the city's enduring appeal as a tourist destination, went on to meet Mr Nagin, local government officials and small business owners.
He also gave a speech in the Mississippi town of Bay St Louis, where many people are still living in tents and trailers amid the debris of their homes.
'Easy to forget'
Bush spokesman Trent Duffy earlier acknowledged that recovery would be a slow and costly process but stressed the federal government was in it for the long term.
"The destruction down there looks like it just happened yesterday," he said.
"It's easy for people outside the region to forget the challenges they still face."
Over the next nine days, the BNOB commission will outline plans to revamp key areas including health, education and infrastructure.
Mr Nagin said: "This report is controversial. It pushes the edge of the envelope. Let's, as a community, take the time. Let's discuss it, let's debate it, let's analyse it and let's tweak it.
The full report - which will eventually be presented to the federal government - is thought to include plans for a 53-mile light railway system and a new jazz district, as well as recommendations on how to prevent future flooding.
Mayor Nagin is expected to have all of the proposals ready by 20 January, and can then approve or reject them.
It was estimated that the rebuilding effort outlined in the report would cost at least $17bn, with $12bn of that devoted to buying condemned properties.
Only a fifth of New Orleans' population of half a million has returned since the mass evacuations in the wake of the 29 August hurricane and subsequent flooding of the city.
Most people are living in areas that did not suffer flood damage and where services have been restored, yet vast swathes of the city hit by deep flooding are still without power.