Duterte's announcement comes as the Philippines government prepares to resume official peace talks with the Communist Party of the Philippines, National Democratic Party and the armed New People's Army in August, a move which may signal an end to Asia's longest running communist insurgency.
"To the CPP/NPA/NDF, let us end these decades of ambuscades and skirmishes. We are going nowhere. And it is getting bloodier by the day," Duterte said in his speech.
He also called on his "Muslim brothers" to end "centuries of mistrust and warfare", saying that "all of us want peace, not the peace of the dead but the peace of the living."
"Let me make this appeal to you: If we cannot, as yet, love one another, then in God's name, let us not hate each other too much," he said.
Terrorists, criminals and drug offenders in the crosshairs
Duterte's conciliatory tone, however, did not extend to Abu Sayyaf, the terrorist group which has been operating in southern Philippines. The new president vowed to use "the full force" of the Philippines armed forces to "crush" Abu Sayyaf,
Duterte's olive branch didn't extend to criminals and drug offenders either. Though the 71-year-old often veered off script and made off-the-cuff jokes during his 90 minute speech, he was tough-as-nails when speaking about his war on drugs, crime and corruption.
Duterte's May 9 landslide election win
was largely based on promises to eliminate crime and implement changes in government.
"There will be no let-up in this campaign. Double your efforts. Triple them if need be. We will not stop until the last drug lord, the last financier, and the last pusher have surrendered or been put behind bars or below the ground, if they so wish", he said, to applause.
However, he warned police officers and other officials that there would be "hell to pay" for those that abused their authority, saying such people are "worse than criminality itself".
Since Duterte took power, the Philippines has seen a spike in vigilante and extra-judicial killings of suspected drug dealers, with some media outlets estimating over 300 killed
across the country since his June 30 inauguration.
Church: Thou shalt not kill
While the SONA was going on, the powerful Catholic Church also delivered a message to Duterte and the people of the Philippines, holding a special mass to launch the "Huwag Kang Pumatay," or "Thou Shall Not Kill," campaign.
In his speech, Duterte made a not-so-subtle reference to the Philippine clergy.
"To those of who are still drug-free, if you don't want to die, if you don't want to be hurt, don't rely on those priests or to human rights. That won't prevent your death. Just don't do it (take drugs)."
Public sentiment is divided over the fight against illicit drugs
and the extra-judicial killings have elicited strong feelings both at home and abroad.
An ex-user, John Tan, said he started using drugs at 12 years old, but turned his life around four years later.
"The answer is more complex than just killing people suspected of being involved in drugs," he said on his Facebook page.
"People are people, drug dependent or not. We all have dreams, hopes and pains. In my humble opinion, until we care enough about the suffering and the hurting, drugs will always be around."
This sentiment has been echoed by human rights groups, who have urged the government to stop the killing of suspected drug criminals as it deprives them of their right to due process and a fair trial.
But many of Duterte's supporters believe his government's stance on crime and drugs is justified.
According to a statement from the President's office, the Philippine National Police (PNP) has announced a 13% drop in the crime rate since Duterte won the presidency. His office has called the anti-drug campaign a success - the latest count from the PNP claims that 114,833 drug dependents have turned themselves into the authorities.
Duterte also remains a popular leader, with 91% approval rating from a recent Pulse survey.
SONA held in peace
This year saw none of the violent clashes with militant groups that marred previous SONA speeches. Militant groups still staged peaceful rallies demanding more equitable rights for laborers, farmers and indigenous minority groups.
Duterte also made an impassioned appeal to lawmakers to expedite a proposed shift to a federalist form of government and support his economic agenda.
The annual speech used to be a red carpet affair, with lawmakers in their finest Filipiniana shirts and long gowns, but this year's guests followed Duterte's issued strict orders to tone the fashion and pageantry down.