That statement prompted the U.S. delegation and 27 others to get up and walk out.
Earlier in the day, President Barack Obama had advocated working towards peace in the Middle East.
Some said Ahmadinejad's words were not surprising.
"It's just an attempt by Ahmadinejad to change the focus from his problems in Iran to other issues that he's much more confident talking about," said Reza Aslan, an author
A White House spokesman said President Obama found the remarks offensive especially since they were made so close to the site where the World Trade Center once stood.
The president is scheduled Friday for an interview with BBC Persia.
The White House said it will be a chance for him to talk directly to the Iranian people.
President Obama will be using his third and last day at the U.N. to focus on averting renewed conflict in Sudan and easing tensions between China and its Southeast Asian neighbors.
The Associated Press contributed to this report.
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