Some 800 people turned out to greet the American president at the town hall meeting on Wednesday, most of them from the US-funded Young Southeast Asian Leaders Initiative.

Obama listened to a live rap performance by Suboi, one of Vietnam's best known female rappers, who also asked the US president about the role governments should play in promoting art.

"Governments sometimes get nervous about art," Obama replied. "But if you try to suppress the arts, then I think you're suppressing the deepest dreams and aspirations of a people."

The US leader also praised hip-hop music "which started out as an expression of poor African Americans" and became a "global phenomenon."

"Imagine if at the time when rap was starting off our government had said 'No' because some of the things you say are offensive, or some of the lyrics are rude, or you're cursing too much?" he said.

Obama appeared to be popular with the young crowd, in a country where youth has little contact with its politicians.

"I like his behavior, being the most powerful man in the world, but very close to people, not like leaders here," said 22-year-old Tran Huu Duy. "They only wear suits and talk clichés... (they) cannot inspire young people."

Obama 'fooled around' in school

Obama also urged his audience to "do something about" climate change, saying that global warming could have "a huge impact on Vietnam's ability to feed its people," and urging all countries to work together to prevent disaster.

"One of the great things about your generation is that you're already much more conscious about the environment than my generation was or previous generations were," he said.

During the meeting, a young man asked about his school days, prompting the president to reply that he "fooled around a lot" and was not serious about school. Looking ahead, Obama said he would probably return to working as an organizer.

"I'll be like a community organizer, except a little more famous than I used to be," he said.

Ahead of the Wednesday event, Obama met privately with staff and family members of the US consulate in Ho Chi Minh, the city previously known as Saigon. The meeting also included seven former worker of US embassy who served during the fall of Saigon in 1975.

The town hall appearance marks the final stage of Obama's three-day visit to Vietnam, which saw him lift the arms embargo and urge more freedom in the communist country. He is set to continue to Japan.