U.S. President Barack Obama stressed on Sunday that he firmly believes in a diplomatic resolution of Iran's disputed nuclear program, though he did not rule out a military action as a last resort.

Addressing the annual meeting of the American Israel Public Affairs Committee, an influential pro-Israel lobbying group in Washington, Obama drew attention to the efforts being made by Washington and its allies to prevent Iran from acquiring a nuclear weapon.

"In that effort, I firmly believe that an opportunity remains for diplomacy -- backed by pressure -- to succeed," he remarked.

He said as president and commander-in-chief, he has "a deeply- held preference for peace over war," and will only use force "when the time and circumstances demand it."

"We all prefer to resolve this issue diplomatically," he added.

Appealing to Israel for more time to allow sanctions to "sink in," Obama said there is already "too much loose talk of war" and "now is not the time for bluster."

But he also warned Iran's leaders not to have any "doubt about the resolve of the United States, just as they should not doubt Israel's sovereign right to make its own decisions about what is required to meet its security needs."

"A nuclear-armed Iran is completely counter to Israel's security interests," said Obama. "But it is also counter to the national security interests of the United States."

Israeli officials have been clamoring for a preemptive strike on Iran's nuclear facilities before the country obtains the ability to make nuclear bombs, an idea rejected by the Obama administration.

Obama is scheduled to meet with Israeli Prime Minister Benjamin Netanyahu on Monday at the White House, where the latter is expected to continue to press the United States for a harder line on Iran.

In an effort to placate Israel and its supporters, Obama reiterated that he meant what he said when he declared that he would "take no options off the table" in confronting Iran over its nuclear program.

"That includes all elements of American power" with a military effort to be prepared for any contingency, he asserted.

He also pledged to do "what it takes to preserve Israel's qualitative military edge," saying Israel must always have the ability to defend itself against any threat.

Right before Obama's speech, Israeli President Shimon Peres, at the same arena, called Iran "a danger to the entire world," vowing to stop the country's acquisition of a nuclear weapon. "The United States and Israel share the same goal -- to prevent Iran from developing a nuclear weapon, there is no space between us," claimed the veteran leader.

"Our message is clear: Iran will not develop a nuclear weapon," he noted.