Gates told reporters at a Pentagon roundtable that coalition and Iraqi forces have their "foot on the neck of al-Qaida in Iraq."
But now the threat lies in the Federally Administered Tribal Areas and the North West Frontier province of Pakistan and the border area in Afghanistan. The safe havens pose a threat to the U.S. homeland, allowing terrorists to refit, train, plan and raise money for attacks.
Gates said the United States and the Afghans must work together to confront the problem on the Afghan side. Coordination and cooperation on both sides of the border are crucial to stopping the terror threat in the region, he added.
The secretary said the Defense Department wants to be responsive to the requirements of commanders in Afghanistan. This includes deploying three more brigade combat teams and an aviation brigade to the region in 2009.
On the Pakistani side, Gates said he thinks the solution for the area lies in fostering a partnership with Pakistan.
"I think that we just need to continue looking at ways in which we can strengthen our partnership with Pakistan and do what we can to enable them to deal with the problem on their side of the border," Gates said.
The United States has worked to equip Pakistani forces for the counterterrorism mission. U.S. trainers also began a "train the trainers" program for Pakistan's Frontier Corps, a federal paramilitary force, and for the Pakistani army near Peshawar.
"We are prepared to move as quickly as the Pakistanis are," the secretary said. "I know they're uneasy about the American footprint in Pakistan, and I think we have to be sensitive to their political concerns. At the same time ... we cannot do this on our own."
Gates also talked about the recent terror attack in Mumbai, which reportedly killed at least 179 people .
"[The attack] clearly was the action of an extremist group that apparently was targeting Americans and Britons," Gates said. "But the truth is, most of the people who were killed were Indian. It's important that we find out who did it and try and prevent it from ever happening again."
Gates called on restraint on both sides of the Pakistan-Indian border. "I think what we would like to see is both countries work together to make sure that something like this doesn't happen again," he said.