In a criticism of Republican Presidential candidate Donald Trump’s rhetoric, US President Barack Obama said if America turned away refugees simply because they are "Muslim", it would reinforce the terrorists’ propaganda and the "ugly lie" that the US is opposed to Islam.

Obama, who hosted a ‘Leaders Summit on Refugees’ during the 71st UN General Assembly session here on Tuesday, said the world was facing a refugee crisis of "epic proportions" with more than 65 million people having been driven from their homes, more than any time since the World War-II.

"Among them are more than 21 million refugees who have fled their countries – everything and everyone they’ve ever known, fleeing with a suitcase or the clothes on their back," he said.

"And if we were to turn refugees away simply because of their background or religion, or, for example, because they are Muslim, then we would be reinforcing terrorist propaganda that nations like my own are somehow opposed to Islam, which is an ugly lie that must be rejected in all of our countries by upholding the values of pluralism and diversity," he said at the summit attended by UN Secretary-General Ban Ki-moon, Pakistan Prime Minister Nawaz Sharif, Canadian Prime Minister Justin Trudeau and Bangladesh Prime Minsiter Sheikh Hasina.

He highlighted that in recent years, the US has put in place intensive screening and security checks to take in refugees as well as ensure the nation’s security.

"Refugees are subject to more rigorous screening than the average tourist. We’ve seen in America, hardworking, patriotic refugees serve in our military, and start new businesses and help revitalise communities. I believe refugees can make us stronger," he said.

"So the challenge to our security is because when desperate refugees pay cold-hearted traffickers for passage, it funds the same criminals who are smuggling arms and drugs and children.

"When nations with their own internal difficulties find themselves hosting massive refugee populations for years on end, it can risk more instability. It oftentimes surfaces tensions in our society when we have disorderly and disproportionate migration into some countries that skews our politics and is subject to demagoguery," he said.

For the past year, Trump has been warning that letting refugees in would make the US vulnerable to new terror attacks. The brash tycoon has spearked a wave of criticism over his comments on race, immigrants and refugees, including calling for a ban on Muslim travelers to the United States.

And this week, one of Trump’s sons triggered an online storm with a tweet comparing Syrian refugees to a bowl containing an assortment of tainted and untainted candies.