US President Barack Obama discussed efforts to achieve Middle East peace in Egypt on Thursday before making an address that will be crucial to his efforts to repair US ties with Muslims.

His speech is aimed at more than 1 billion Muslims across the world, but choosing Cairo underscores his focus on the Middle East, where he faces big foreign policy challenges.

Obama wants to build a coalition of Muslim governments that will back his efforts to revive stalled Middle East peace talks and help the United States curb Iran's nuclear programme, which Tehran says is peaceful but the West says is to build bombs.

"We discussed how to move forward in a constructive way to bring peace and prosperity to people in the region," Obama told reporters after talks with President Hosni Mubarak, who has ruled Egypt since 1981 and kept a tight lid on opposition.

"I emphasised to him that the US is committed to working in partnership with countries in the region so all people can meet their aspirations," he said before heading to a mosque in a quarter of Cairo that is full of Islamic architectural gems.

Obama acknowledged this week that it would take more than a speech to reconcile the United States and the Muslim world. Many Muslims share that view and say they want actions, particularly to resolve the Arab-Israeli conflict.

Highlighting the hostility Obama faces from some quarters, the supreme leader of Washington's arch regional foe, Iran's Ayatollah Ali Khamenei, said in an address America was "deeply hated" and only action, not "slogans", could change that.

When asked by a reporter if he discussed Iran with Mubarak, Obama said: "You name it, we discussed it."    

US officials told reporters on Wednesday that Obama would talk candidly and thoroughly about issues that had "caused tensions between the United States and the Muslim world", including explaining his policies toward Afghanistan and Iraq.

Obama wants to rewrite the US foreign policy of his predecessor George W Bush that alienated allies and fuelled a wave of anti-Americanism in the Muslim world. But he has said he will not be apologising for the Bush administration's policies.

The Bush administration's campaign against terrorism, with its invasions of Iraq and Afghanistan, was seen by many in Muslims as an assault on their faith. Bush launched what he called a "war on terror" after al Qaeda's Sept. 11 attacks.

In comments broadcast when the U.S. president was in Saudi Arabia on Wednesday, Al Qaeda leader Osama bin Laden said Obama planted the seeds of "revenge and hatred" among Muslims with his support for a crackdown on Taliban strongholds in Pakistan.

Iran's Khamenei weighed in as Obama arrived in Egypt, saying: "Even if they give sweet and beautiful (speeches) to the Muslim nation ... that will not create change."    

"Action is needed," the Iranian supreme leader said.  A US pollster said on Wednesday that Obama faced a Muslim world that remains sceptical but had recently been warming.

"Muslims around the world want very much to engage with the West, and with the United States significantly, but want to engage as equal partners, instead of a relationship of paternalism," Dalia Mogahed, executive director of the Gallup Centre for Muslim Studies, told Reuters in an interview.-Reuters