The president's assessment puts him at odds with Israel, which says Iran is just months away from being able to build a bomb.
Obama, in an interview with The Associated Press, acknowledged that American estimates are "more conservative" than those of the Israelis.
Obama also says the world must "test" whether Iranian President Hassan Rouhani is serious about resolving its nuclear dispute diplomatically. But he says the US won't take a "bad deal" from Iran.
Israel has dismissed Iran's outreach to the U.S. Obama says if he were Israel's leader, he'd "be very wary as well of any kind of talk from the Iranians.