Fighter jets drew an Egyptian flag in the sky above Cairo and military helicopters flew over the city centre as the president made his way to parliament, where he was greeted with a 21-gun salute.
“Together we face economic, social and political challenges and their negative effects on all aspects of life,” he said.
“Only those who have opted for violence, terrorism and extremism will be excluded from common spaces,” he said.
Sisi has regularly been accused by human rights defenders of violating public freedoms and silencing opponents.
Two of those arrested in recent months are Wael Abbas, a blogger and journalist, and Shadi Ghazali Harb, a youth leader during the 2011 revolution that toppled longtime dictator Hosni Mubarak.
Before addressing public officials and religious authorities, the president led a minute’s silence for the Egyptians who had died “for the country”.
Egypt has been hit by a series of deadly militant attacks in recent years.
Jihadists have killed hundreds of soldiers, policemen and civilians, mainly in the northern Sinai peninsula but also elsewhere in Egypt.
“Together we fought brutal terrorism that sought to undermine the unity of our homeland,” he said.
Economy and security
Seven years after the January 2011 uprising, Sisi will face two major challenges in his second term: security and economic recovery.
Since February 9, the army has been conducting a vast military campaign to “cleanse” the country of terrorists. The fighting has so far killed at least 200 jihadists and 35 soldiers, according to official figures.
Since taking office, Sisi has enacted a series of reforms aimed at stabilising an economy hit by security threats and runaway inflation.
In November 2016, the IMF granted Egypt a $12 billion (10 billion euro) loan over three years, conditional on reforms including the adoption of a value-added tax, energy subsidy cuts and floating the pound.
And while GDP growth has increased in the past year from 4.2 percent to 5.2 percent, drastic cuts to state subsidies have proved highly unpopular.
In the next four years, the president is expected to continue pursuing major infrastructure projects including the construction of a new capital in the eastern desert.
Sisi, who as army chief ousted Egypt’s first freely elected president Mohamed Morsi after mass street protests in 2013, won his first term in 2014 with an overwhelming majority of the vote.
His only opponent, Moussa Mostafa Moussa, was relatively unknown and himself a fervent Sisi supporter.
All other contenders were either sidelined or withdrew.
Egyptian media has reported that Sisi will likely reshuffle his cabinet in the coming days.