Q+A: Obama grapples with crises

WASHINGTON (Reuters) - President Barack Obama replaced his top Afghan war commander on Wednesday, grappling with the latest in a series of challenges that include a disastrous oil spill and high unemployment.

Here are some questions and answers about the problems confronting Obama ahead of meetings in Canada this week of the Group of Eight and Group of 20 nations.

WHAT IS OBAMA'S MOST PRESSING PROBLEM?

Obama has sought to assert leadership over the Gulf of Mexico oil spill since the oil rig explosion on April 20 killed 11 workers and the BP Plc well began spewing millions of gallons of oil.

The worst spill in U.S. history has wreaked environmental havoc, threatened tourism and fishing and generated criticism that Obama's handling of the crisis has been too slow.

Anger over what some Britons view as anti-British invective over BP is expected to complicate his first meetings with Britain's new prime minister, David Cameron.

Obama has said containing the spill is his highest priority, visited the Gulf four times and ordered a moratorium on deepwater drilling now under legal attack.

But after several failed attempts to stop the spill, all eyes are on whether a containment system can keep the oil in check until relief wells being drilled can finally stop it.

WHAT IS OBAMA'S MOST PERSISTENT PROBLEM?

The spill might be Obama's most pressing problem, but his most persistent is the economy, with unemployment that is still near 10 percent posing political problems for Obama and his Democratic party as they fight to preserve majorities in Congress in November elections.

Going into the G8 and G20, the administration is concerned about the potential fallout for the United States of the European debt crisis, which could dampen world growth and depress U.S. exports.

WHERE DO THINGS STAND WITH THE WARS?

AFGHANISTAN - The dismissal and replacement of General Stanley McChrystal on Wednesday after the general's disparaging comments to a magazine have added to uncertainty about the unpopular nine-year-old war.

Obama ordered 30,000 more U.S. troops to Afghanistan in December to try to break the momentum of the Taliban, but the insurgency is stronger than ever despite Obama's desire to start withdrawing U.S. troops in 2011.

IRAQ - Obama has declared the Iraq war will end for the United States by the end of 2011, when remaining U.S. troops will withdraw. Months after a March 7 parliamentary election, Iraq still does not have a government, raising fears that the delay could exacerbate sectarian tensions.

WHAT ABOUT OTHER ISSUES ON OBAMA'S DOMESTIC AGENDA?

Obama's plan to overhaul U.S. financial regulation looks likely to pass soon, and Obama wants to tout the changes as a model for other countries at the G20.

A House-Senate panel is hammering out a final bill after separate measures passed both houses of Congress, and administration officials say other members of the G8 and G20 already consider the sweeping overhaul passed.

Obama also signed a landmark overhaul of the U.S. healthcare system into law in March, notching a win on his top domestic priority.

But it is unclear how much healthcare will help Democrats in November. Obama has gone on the offensive over the bill, battering Republicans who attack the measure as an attempted government takeover of a major industry.

HOW DOES THE U.S. DEFICIT COMPLICATE THE PICTURE?

The debt woes of countries such as Greece, Spain and Portugal have put a spotlight on the U.S. budget deficit, which is projected to hit $1.6 trillion this year.

Republicans have attacked Obama over the red ink, labeling him a big spender. The White House counters that the deficits are a legacy of fiscal mismanagement under the Bush administration and that Obama's programs will cut them back.

Some Democratic lawmakers have become more reticent about backing additional social spending amid indications U.S. voters are increasingly worried about the debt load.

White House officials are debating how far to go in emphasizing a message of budgetary restraint at home and at the G20, given the lackluster pace of economic growth remains a pressing concern.

ARE THERE ANY OTHER PRESSING INTERNATIONAL ISSUES?

The U.N. Security Council approved a fourth round of sanctions on Iran, a victory for Obama but one that is unlikely to halt Tehran's nuclear program.

Obama has made Middle East diplomacy a priority and had succeeded in reviving Israeli-Palestinian peace negotiations through U.S.-mediated indirect talks.

But there has been next to no progress and prospects looked even more bleak after Israeli commandos stormed a Turkish aid ship bound for Gaza, leaving nine dead and sparking an international outcry.

(Additional reporting by Caren Bohan and Ross Colvin; editing by Howard Goller)