Top U.S. military commanders could soon be heading to new jobs with steep challenges.

President Barack Obama has nominated Gen. John Allen to become the next Supreme Allied Commander Europe, in which he would oversee NATO military operations.

Taking Allen's place in Afghanistan would be Marine Corps Gen. Joseph Dunford, who would see the war through some of its final fighting seasons.

"If confirmed by the Senate, he will lead our forces through key milestones in our effort that will allow us to bring the war to a close responsibly, as Afghanistan takes full responsibility for its security," Obama said in a statement.

The Afghanistan posting is unique in that U.S. military commanders are cast in the dual role of soldier-diplomat, and have to have extensive interactions with Afghanistan's political administration.

Stephen Flanagan, an analyst at the Center for Strategic and International Studies, says Allen's nomination "signals the U.S. reaffirmation to the transition plan in Afghanistan. You'll have a NATO commander who is very familiar with the situation on the ground. It's a symbolic appointment and very reassuring to Afghans and NATO partners. It shows NATO is serious about the transition plan."

Allen, whose nomination also needs Senate confirmation, will face key challenges, including some European allies worried about U.S. plans to remove one combat brigade from Europe within the next five years.

Also, many NATO members have been slashing defense spending because of the ongoing European economic crisis.

"You can't completely compensate for the budget cuts that the austerity measures have imposed," says Flanagan. "One of the problems they have now is, a lot of allies have been making cuts to defense without considering how it affects the entire allied defense structure."

Allen's challenge will be to work within the confines of lower budgets and reduced capabilities, while implementing the "smart defense" doctrine, in which NATO allies pool and share resources like special operations forces and certain weaponry.

Moreover, the civil war in Syria shows no sign of ending, so Allen could be forced to confront the question of possible military intervention there.

After Syrian forces shot down a Turkish plane and the two nations exchanged fire in subsequent small skirmishes, NATO officials had to reassure Turkey that they were prepared to defend Turkey, if necessary.

Turkey is a NATO member and an attack on one member necessitates a unified response from all members under certain circumstances.

As for Afghanistan, the post Allen is leaving, there is much work to be done.

Joint Chiefs Chairman Gen. Martin Dempsey cited "significant security, governance and development challenges" and the emergence of new threats.

Dempsey praised Allen for expanding the ranks of the Afghan National Security Forces and for the signing of a U.S.-Afghan strategic framework agreement.

But during the past year, insider attacks have skyrocketed. More and more Afghan soldiers are turning their weapons on U.S., British and other allied troops.

Allen had to institute huge changes in how troops do business in Afghanistan, including suspending some joint patrols and assigning some troops as "guardian angels."

Dunford is an infantry officer, who commanded the 5th Marine Regiment during the initial invasion of Iraq in 2003.

Flanagan says the appointment of a Marine in Afghanistan "is a show of appreciation" for the efforts of Marines in the southwest part of the country. Marines went into Helmand Province in 2009, an area controlled by the Taliban that had never seen allied troops.

But Flanagan says Dunford will have challenges of his own, including the continued development of the Afghan Army and police.

"How capable are they going to be when the ratios start to shift?" asks Flanagan. "They may be used to having a lot of support from U.S. troops, but those numbers will be going down. Can they hold up without backup?"

These are questions with no easy answers, but ones the new commanders will have to answer.