The call came in Sydney in the wake of violent protests around the world sparked by the publication of a series of cartoons, initially printed in a Danish newspaper, depicting Mohammed.
Mr Clinton said it is important to find out what was behind the cartoons and the reasons for their publication.
"I think that we ought to have such an attempt to take all of this brouhaha (about the cartoons) ... and use it to force a dialogue," he told a global business forum in Sydney.
"Does anybody here know whether that cartoonist knew that it was blasphemous when he did the picture of Mohammed?
"We could use this thing to build bridges instead of burning them and we need to do that more."
Spearheading AIDS
The former US president and Australian Foreign Minister, Alexander Downer, also signed an agreement whereby Australia will give up to A$25 million dollars to strengthen efforts to deliver HIV/AIDS treatment in the Asia Pacific.
AusAID and the Clinton Foundation will work together to complement existing Australian HIV/AIDS projects.
Projects are being planned in Papua New Guinea, Vietnam and China.
Before signing the memorandum of understanding at Sydney's Westin Hotel, Mr Clinton said more needs to be done to address the HIV/AIDS epidemic which has infected about 40 million people.
"There is clearly a moral imperative to do something about this... since this disease is 100 per cent preventable," he told reporters.
"There is (also) medicine which stops transmission to children of pregnant women about 100 per cent of the time.
"And finally there are anti-retrovirals which will give almost all children and adults a normal lifespan if they're given as part of an overall health plan," he said.