The report sparked widespread criticism with Kenyans mocking the report on social media, many posting images of the east African nation's famous tourist sites, with hashtag #SomeoneTellCNN trending on Twitter worldwide.
The Kenyan government also said CNN should apologise for what it claimed was "a pattern of anti-Kenya propaganda" by the news channel.
"Kenya is a hotbed of vibrant culture, spectacular natural beauty, and infinite possibility," Kenyatta said, in a speech at a business summit in Nairobi, standing alongside Obama.
Two years ago a Shebab assault on the Westgate shopping mall in the heart of the capital left 67 dead, while in April they massacred 147 people in a northern Kenyan university.
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Kenyatta mentioned the attack on Westgate -- calling it a "heart-breaking act of criminal brutality (that) became an emblem of extremist violence and terrorism."
But he also pointed out that the mall reopened last week, and that Kenya offered far more than the violence that often dominates international media headlines.