WASHINGTON – President Barack Obama warmly courted top US executives Monday, pledging to scrap regulation and lay the groundwork for innovation in a bid to "make America the best place on Earth to do business."

But he also stressed the "mutual responsibilities" of business and government in his speech to the US Chamber of Commerce, saying corporate profits needed to lift the standard of living for American workers, not just meet the corporate bottom line and fatten the pockets of executives.

Obama and the chamber -- the most powerful business lobby in Washington -- have been at odds over economic policy in his first two years in the White House.

Their differences have narrowed in the months since Republicans handed Obama's Democrats a major defeat in November elections, and Obama's address Monday suggested he was keen to bury the hatchet and move on.

"I'm here today because I am convinced... that we can and we must work together," Obama told hundreds of the country's business leaders at chamber headquarters, just a stone's throw from the White House.

"Whatever differences we may have, I know that all of us share a deep abiding belief in this country -- a belief in our people, and the principles that have made America's economy the envy of the world."

"I get it," Obama said of the challenges businesses face to cut costs and maintain profit margins amid ever-present pressure from shareholders in the aftermath of the worst recession in generations.

"But as we work with you to make America a better place to do business, ask yourselves what you can do for America. Ask yourselves what you can do to hire more American workers, what you can do to support the American economy, and to invest in this nation."

The president has sought to reach out to the business sector since a wave of anti-Washington anger swept Republicans to power in the House of Representatives.

He has reversed his position on the Bush-era tax cuts and, faced with unemployment levels that remain at a stubbornly high nine percent, has placed business-savvy staff in key positions.

Last year, the chamber opposed Obama's health care reform, his drive to change Wall Street practices as well as other legislative initiatives. The group also gave millions of dollars in campaign donations to Republican candidates.

The White House publicly responded by accusing the chamber of funneling money from overseas to US political candidates.

Last month the powerful lobby, which claims to represent three million businesses, offered qualified backing for key legislative fights ahead but warned it would not walk in "lock-step" with Obama in the second half of his four-year term.

The administration would "help lay the foundation for you to grow and innovate and succeed," by upgrading transportation and communications networks, investing in education, and working "to knock down barriers that make it harder for you to compete, from the tax code to the regulatory system," Obama said.

"We need an economy that's based not on what we consume and borrow from other nations, but what we make and what we sell around the world. We need to make America the best place on earth to do business," he said.

But he was quick to stress that reforming the tax code and boosting exports should not just "translate into greater profits and bonuses for those at the top.

"They have to be shared by American workers, who need to know that expanding trade and opening markets will lift their standards of living as well as your bottom line," he said.

"We cannot go back to the kind of economy -- and culture -- that we saw in the years leading up to the recession, where growth and gains in productivity just didn't translate into rising incomes and opportunity for the middle class."

Obama's address built on his State of the Union speech last month, in which he highlighted the need to revitalize US business, create jobs and invest in world-class infrastructure in order to boost American competitiveness.