With less than a month until the Aug. 2 deadline before the world's largest economy might default on its obligations, U.S. President Barack Obama on Tuesday urged the Congress to reach "a balanced" debt reduction agreement.

"We need a balanced approach to debt reduction," Obama told reporters at a White House press conference, adding that the agreement should include both cut in government deficit and investment in the future growth.

Obama said that he spoke over the weekend with both Democratic and Republican congressional leaders on their impasse over the U.S. debt and deficits and that the discussions are yielding progress.

But he acknowledged that real differences still exist.

His short remarks was the latest warning from the Obama administration to Republicans as the two parties engage in tough negotiations and have not yet inked a deal to raise the 14.29- trillion-U.S. dollar debt ceiling.

Republicans want deep spending cuts without any tax increases while Obama and fellow Democrats call for investment and revenue increase along with trimming the debt. That means new income in the form of higher taxes from the rich and some amount of public spending.

Besides, Republicans want to reach a deal that could avoid the government default in a short-term. But Democrats try to ensure a longer-term debt-limit increase so that the issue may not continue to be a key hurdle on the way of Obama's re-election in 2012.

Obama stressed that he opposes a short-term deal to raise the nation's debt limit, saying that a short-term debt-limit increase would amount to an effort to "kick the can down the road."

"We need to come together over the next two weeks to reach a deal that reduces the deficit and upholds the full faith and credit of the United States government and the credit of the American people,'' Obama said, adding that he has invited lawmakers to the White House on Thursday to continue negotiations.

Analysts say that chances are rare that the two parties will reach a comprehensive deficit cut and borrowing limit agreement as it is running out of time.