US-Australia alliance in top nick: Obama

US President Barack Obama has tried out Australian slang during an entertaining speech at a dinner held in his honour.

US President Barack Obama has entertained his Australian hosts by trying his hand at the local lingo at an official dinner.

Mr Obama described speaking to American troops in Afghanistan who were mystified as to why their Australian counterparts were always talking about cheese.

It transpired the Aussies were just greeting them with "Cheers".

"We may not always speak the same way or use the same words but I think it's pretty clear ... that we understand each other, we see the world in the same way," Mr Obama told the more than 600 dinner guests on Wednesday night.

He then made Parliament House's Great Hall shake with laughter when he described his earlier bilateral talks with Prime Minister Julia Gillard as "a real chinwag" and not "just a lot of earbashing".

The president particularly liked the latter phrase, saying he could get a lot of use from it in Washington.

The alliance between the two countries was "in top nick" - even if Mr Obama still disputed the merits of Vegemite.

Luckily, the yeast spread wasn't on the menu since Ms Gillard told the crowd her partner Tim Mathieson had promised Mr Obama's wife Michelle the president would be well fed in Australia.

The American First Lady was worried her husband worked too much and forgot to eat.

Ms Gillard said they'd made sure there were hundreds of witnesses on Wednesday night to his meal.

After a jokey start, her speech turned to the long friendship and similarities between the two countries.

"We share a long history ... defined always, then and now, by the things we do together to honour our national pledges, to be young and free, to be home to the brave," Ms Gillard said.

Opposition Leader Tony Abbott evoked Ms Gillard's address to the US Congress in March, talking about his memories of the 1969 moon landing.

"It was the only time in my life I ever wagged school and I'd like to think that I did it for America," Mr Abbott said to laughter.

"The subsequent corporal punishment, I suppose that was for America too."

Mr Abbott also talked about linguistic mix-ups, recounting his first visit to the US as an MP where a briefing that described him as a "ferocious liberal" and "deeply anti-republican" meant he spent a fortnight being introduced to communists.

But there was an intuitive bond between the countries which meant "our citizens are not strangers to each other", he said.

Dinner guests included Queensland Premier Anna Bligh, South Australian Premier Jay Weatherill and ACT Chief Minister Katy Gallagher.

There were representatives from Australian businesses, unions, business interest groups, academics and non-government organisations, as well as current and former politicians and celebrities.

Also present was former coalition prime minister John Howard, who had a good personal relationship with former US president George W Bush.