Tony Blair has acknowledged the differences between France and the UK over Iraq but insisted there is more common ground than disagreement.
President Chirac and Tony Blair differed over Iraq
At a joint news conference with Jacques Chirac Mr Blair highlighted areas of co-operation such as in Africa.
The French president is in Britain to mark the climax of celebrations of the centenary of the Entente Cordiale.
After their talks Mr Chirac said there were "manifold areas" where France worked hand in glove with the UK.
Iraq was the "one and only" issue of disagreement between the two nations, said Mr Chirac.
He added: "Who is right or wrong, history will tell."
Mr Blair highlighted areas of bilateral co-operation over Iran, Afghanistan, the Balkans, over European defence, and recently in the West African state of Ivory Coast.
Mr Chirac meanwhile went out of his way to express sympathy about the death of aid worker Margaret Hassan, believed murdered in Iraq.
Mr Chirac's two day visit began with a Guard of Honour at the Foreign and Commonwealth Office in the UK capital before joining the prime minister for the talks.
At the news conference the two leaders were asked about the situation in the Middle East following the death of Palestinian leader Yasser Arafat.
Mr Chirac said: "The UK and France consider there is window of opportunity that we could have a more stable order and we should do everything we can to achieve that.
"I understand that there is a consensus to try and ensure that the elections in Palestine are possible and that the Palestinian people can express their
Mr Blair added that he agreed there was consensus about the objectives in the Middle East - of two sovereign states of Palestine and Israel.
Boost to terrorism?
"The good news is that there is agreement as to where we all want to get to," he said.
"The bad news is that the parties are so far apart."
In a BBC interview on Wednesday, Mr Chirac suggested the situation in Iraq had helped to prompt an increase in terrorism.
He also maintained that any intervention in Iraq should have been through the United Nations.
The 'friendly understanding' was signed in April 1904
It was essentially an Anglo-French alliance should war break out with Germany
It marked the start of negotiations between the nations which lasted until World War One
But it also marked the end of centuries of war between the two
"There's no doubt that there has been an increase in terrorism and one of the origins of that has been the situation in Iraq," he said.
"I'm not at all sure that one can say that the world is safer."
Asked about his remarks on Thursday, Mr Chirac added: "If you observe the way things are developing in the world in terms of security and the expansion of terrorism - not just in the Middle East but throughout the world - if you look at all that, you cannot say - and be credible - that the situation has significantly
Mr Chirac is now expected to attend a gala performance of Les Miserables at Windsor as a guest of the Queen.
The Entente Cordiale was set up in 1904 to improve diplomatic relations between the two countries.
France and Britain had been fighting intermittently for hundreds of years.
They were also in competition for colonies in Africa, Asia and the Middle East, with long-standing disputes in Morocco, Egypt, Siam, Madagascar, the New Hebrides, west and central Africa and Newfoundland.