Binyamin Netanyahu and Barack Obama sought to heal their rift over Iran during a weekend conference in Washington, as United Nations nuclear experts began visits to a heavy-water production plant opened for inspection under the recent peace deal.

The leaders of Israel and the US, who clashed repeatedly over western strategy for containing Iran's nuclear programme during last month's negotiations, appeared in more conciliatory mood at a conference organised by the Israeli-American donor Haim Saban – suggesting the affair may have done less damage to relations between the two allies than hawks in Washington have claimed.

"While Israel is prepared to do what is necessary to defend itself, we share President Obama's preference to see Iran's nuclear weapons programme end through diplomacy," Netanyahu told the Saban event via video link on Sunday. "A diplomatic solution is better than a military solution."

On Saturday, Obama stressed that the interim deal with Iran, which loosened sanctions in exchange for steps toward blocking its path toward nuclear weapons, should not be seen as weakening Washington's commitment to defending Israeli interests.

"We will continue to contest [Iran's] efforts where they're engaging in terrorism, where they're being disruptive to our friends and our allies," he told the conference, at the Willard Hotel in Washington. "We will not abide by any threats to our friends and allies in the region, and we've made that perfectly clear."

Substantial policy differences remain, but both leaders downplayed any damage to US/Israeli relations – a bond that Netanyahu called the "critical anchor" in the region.

Obama said: "There are times where I, as president of the United States, am going to have different tactical perspectives than the prime minister of Israel – and that is understandable, because Israel cannot contract out its security. In light of the history that the people of Israel understand all too well, they have to make sure that they are making their own assessments about what they need to do to protect themselves. And we respect that."

Their remarks came amid media reports that progress was under way in Iran to ensure it abides by the interim agreement struck in Geneva last month. The Associated Press reported claims on Iranian state TV that UN nuclear inspectors had begun their visit to a heavy-water production plant that Iran agreed to open to inspection last month. Behrouz Kamalvandi, a spokesman of Iran's nuclear department, said two inspectors were at the Arak heavy water production plant, 150 miles south-west of Tehran.

Netanyahu argued that the next round of negotiations in Geneva must also include a demand for Iran to cease verbal threats against Israel.

"This is a regime committed to our destruction," said Netanyahu. "There must be an unequivocal demand alongside the negotiations in Geneva for a change in Iran's policy [toward Israel]. This must be part and parcel of the negotiation … there must be a demand to change its genocidal policy."

Netanyahu also suggested that progress toward tougher restrictions on Iran's nuclear ambitions was vital to separate talks over Palestinian peace.

"Our best efforts to reach Palestianian/Israeli peace will come to nothing if Iran succeeds in building atomic bombs," he said. "A nuclear-armed Iran will give even greater backing to the radical and terrorist elements in the region. It will undermine the chance of arriving at a negotiated peace."

But the Israeli prime minister said he welcomed US efforts to promote a peace agreement, joking that his own cabinet was complaining he spent more time negotiating with the secretary of state, John Kerry, on the subject than he did with them.

"I am ready for historic compromise that ends the conflict between us once and for all," Netanyahu said. "My willingness to make peace flies in the face of a persistent myth that Israel is unwilling to show flexibility."

Speaking to the conference on Saturday, Kerry, who has just returned from a trip to Jerusalem and Ramallah, said a study by US general John Allen showed it was possible to establish a permanent Palestinian state without compromising Israeli security.

"We are convinced that the greatest security will actually come from a two-state solution that brings Israel lasting peace," he said.