Extending our previous work [T. Wang, R. D. C. Monteiro, and J.-S. Pang, Ma
th. Programming, 74 (1996), pp. 159-195], this paper presents a general pot
ential reduction Newton method for solving a constrained system of nonlinea
r equations. A major convergence result for the method is established. Spec
ializations of the method to a convex semidefinite program and a monotone c
omplementarity problem in symmetric matrices are discussed. Strengthened co
nvergence results are established in the context of these specializations.