WASHINGTON (CNN) -- President-elect Barack Obama called his former Republican presidential rival, Sen. John McCain, a hero at a bipartisan dinner Monday night and encouraged politicians to reach across the aisle.

President-elect Barack Obama greets Sen. John McCain on stage after praising him at a bipartisan dinner.

"I could stand here and recite the long list of John's bipartisan accomplishments ..." Obama said.

"Campaign finance reform. Immigration. The Patients' Bill of Rights. All those times he has crossed the aisle and risked the ire of his party for the good of his country. And yet, what makes John such a rare and courageous public servant is not the accomplishments themselves, but the true motivation behind them."

McCain returned the gracious feelings at the dinner.

"I am very grateful to the president-elect and to all of you for this very considerate gesture, and for allowing me to play a small role in the inauguration of the 44th president of the United States, even if it isn't the one I had in mind a few months ago," McCain said.

"Tomorrow, the President-elect will accept the burdensome privilege of leading America to its next accomplishments and its future greatness," McCain went on to say. "He has my sincere best wishes for his success, and my promise of assistance. For his success will be our success."

After praising McCain, Obama urged everyone to take the bipartisan dinner past "just an inaugural tradition" and turn it into a "new way of doing the people's business in this city."

"We will not always agree on everything in the months to come, and we will have our share of arguments and debates," Obama said. "But let us strive always to find that common ground, and to defend together those common ideals, for it is the only way we can meet the very big and very serious challenges that we face right now."

On the eve of his inauguration, the president-elect even made time for a joke.

"I'm here tonight to say a few words about an American hero I have come to know very well and admire very much -- Sen. John McCain," Obama said as he opened his speech. "And then, according to the rules agreed to by both parties, John will have approximately 30 seconds to make a rebuttal."

Obama's speech at the bipartisan dinner capped a day filled by appearances, including visiting wounded soldiers and exhorting Americans to spend more time in the service of others.

In Washington people took in the sights of pre-inauguration activities and concerts.

"The energy on the streets is something I've never seen before," said Nancy Wigal, who lives in Vernon Square. "People are walking lighter, standing taller and are reaching out to one another. It feels like hope. It feels like shared happiness."

Wigal said Obama's inauguration has given residents hope that change actually will happen.

"It's all because of Obama -- we dare to feel positive that we may have actually elected a leader, not just a politician," she said. "There are impromptu progressive dinner parties, cookouts and house parties. We finally feel like a real change has come to town."

Obama began his day with a surprise visit to wounded soldiers at Walter Reed Army Medical Center. He met with 14 patients injured in either Iraq or Afghanistan.

Obama visited a National Day of Service project, stopping by the Sasha Bruce House, an emergency shelter for homeless teenagers in the Washington area.  Watch Obama speak about service on the eve of his inauguration »

The shelter provides a variety of services, including counseling, job training, and substance abuse prevention assistance, for up to 15 teenagers at a time.

Roughly 30 teenagers are spending the Rev. Martin Luther King Jr. holiday volunteering at the shelter by helping to renovate a dorm room.

Obama rolled up his sleeves and pitched in during the visit, using a roller to help paint a couple of walls and a piece
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