The leaders, who first met in Japan in November, sought to forge a personal bond, tossing an Australian football in the Oval Office and swapping banter about the Down Under delicacy Vegemite, in front of delighted schoolchildren.

The formal portion of Gillard's visit to Washington features a key speech to US business leaders on Tuesday, expected to include a call for bold US economic leadership and a fight against protectionism.

On Wednesday, Gillard will have the rare honor of making an address to a joint session of the US Congress.

Obama and Gillard said they discussed the uprisings in the Middle East, key Asia-Pacific security and economic issues and the fact their nations were "great mates" linked by a pioneering spirit and love of the outdoors.

Obama praised Australia's "extraordinary contribution" to the war in Afghanistan, noting it had paid a heavy price with the largest contingent of forces of any non-NATO member of the coalition.

"We have no stronger ally than Australia," Obama said in marking the 60th anniversary of the formal alliance between the two nations.

Gillard agreed that fighting in Afghanistan was "hard" but swore personal commitment to the mission, which is due to begin transitioning control to Afghan forces later this year.

She said she spoke with Obama about the need to maintain the G20 summit of developed and developing nations as a driver of economic growth and job creation.

The Australian leader also expressed hope for "major progress" at the next Asia Pacific Economic Cooperation (APEC) forum in Hawaii to be hosted by Obama in November.

She stressed Australia's backing for the nascent Trans-Pacific Partnership, a regional free trade grouping being negotiated by nine nations also involving the United States.

Obama had twice been due to visit Australia last year, but put off the trip due to weighty domestic political crises, and has not rescheduled it.

Asked by Australian journalists when he would make the visit, Obama did not commit to a date but said he was looking forward to returning to a country he visited as an eight-year-old boy with his late mother.

"I had a wonderful time, everybody treated me wonderfully and I hope I get a chance to get back there soon," he said.

After their talks, the leaders made an unannounced visit to a Washington area school.

To the amusement of pupils in Arlington, Virginia, Gillard mounted a staunch defense of the Australian staple Vegemite.

But Obama turned up his nose, and proclaimed "It's horrible."

"It's like a quasi-vegetable-byproduct paste -- that you smear on your toast for breakfast. Sounds good, doesn't it?" Obama said.

Earlier, Gillard announced $3.3 million in Australian financing to help build an education center close to the haunting Vietnam Veterans Memorial on Washington's central Mall, dedicated to telling the story of the bloody

conflict.

She said the center would explain Australia's contribution to the war and highlight her country's long ties with the United States.

The plans include a "Wall of Faces" made up of photographs of the 520 Australians killed in the conflict, alongside those of some of their US comrades.

Construction on the $80 million center is due to begin next year.

Gillard also met earlier with Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke and US Trade Representative Ron Kirk.