US President George W Bush has announced that about 8,000 US troops will be withdrawn from Iraq by February - with 4,500 being sent to Afghanistan.
He argued that reduced violence levels in Iraq allowed for a "quiet surge" of troops in Afghanistan.
There are currently 146,000 US troops in Iraq and 33,000 in Afghanistan.
US presidential candidate Barack Obama said Mr Bush was "tinkering around the edges" and not addressing the urgency of the Afghan crisis.
Mr Obama said America's security priority was the militant challenge in Afghanistan and Pakistan on which Mr Bush did not have a comprehensive strategy.
This modest reshuffle is likely to be Mr Bush's last significant policy initiative on the issue which more than any other will shape the way history views his presidency, the BBC's Kevin Connolly reports from Washington.
The overall strategic picture is only slightly changed and it will fall to the next president to define the American missions in the two countries, our correspondent says.
'Fragile and reversible'
Mr Bush announced that a marine battalion of about 1,000 troops, scheduled to leave Iraq's Anbar province in November, would return home as planned without being replaced.
An army brigade of between 3,500 and 4,000 troops will leave in February, accompanied by about 3,400 support forces.
"The progress in Iraq is still fragile and reversible..." Mr Bush said in his speech at the National Defense University.
The Iraqi government is currently negotiating a security agreement on the future of US forces in Iraq before a UN mandate expires.
In signalling increases in the strength of US forces in Afghanistan, Mr Bush said the country faced "some of the most hardened terrorists and extremists in the world".
A marine battalion due to go to Iraq in November will be sent to Afghanistan, followed by an army combat brigade in January, Mr Bush said.
Based on typical battalion and brigade strengths, this would total some 4,500 troops.
Aid agencies point to a 50% increase in insurgent attacks in Afghanistan
The Agency Coordinating Body for Afghan Relief said last month that violence in Afghanistan had reached its worst level since 2001, when US-led forces overthrew the Taleban, with more than 260 civilians killed in July alone.
Afghanistan's government said the bloodshed was connected to peace deals Pakistan's government had sought with Islamist militants in the north-western tribal areas along the border.
Speaking in Dayton, Ohio, Mr Obama accused Mr Bush of "kicking the can down the road to the next president".
"His plan comes up short - it is not enough troops and not enough resources, with not enough urgency."
His presidential rival, John McCain, told a rally also in Ohio that the US was winning the war in Iraq and that Mr Obama was wrong about the conflict.
The European Union's former envoy to Afghanistan, Francesc Vendrell, has accused the Bush administration of "misleading itself" in its approach to the country.
Mr Vendrell told the BBC's HARDtalk programme that the West's strategy in Afghanistan was "incoherent".
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