Israeli Prime Minister Mr Ariel Sharon told President Bush his country would "not reward violence" and would take any measures necessary to prevent attacks on its citizens.
Their telephone conversation followed a severe rebuke by the United States over Israel's 24-hour occupation of Palestinian self-ruled areas on Monday in retaliation for a mortar attack.
Mr Sharon defended the action, saying the army's move into the Palestinian-controlled areas was intended to last for only a short time.
Mr Sharon's office described the exchange as friendly and said in a statement: "The prime minister emphasised to the president our commitment to peace but stated that our utmost commitment is to the security of our citizens."
"The prime minister told the President that peace negotiations would resume only when the situation quiets down and we will not give a prize for violence," the statement added.
But the White House provided a gentler version of the conversation, saying Mr Bush and Mr Sharon "agreed on the need for restraint by all parties to avoid further escalation" of violence.
The US led a chorus of international criticism of the Israeli assault. Britain called the action "unjustifiable", while Germany warned against any step that could escalate the violence and France called on Israel to respect accords and to avoid any new incursion into Palestinian territories.
AFP