Walters told Obama. "Could she?"

"You know, I don't speculate on what's going to happen two years from now," Obama replied.

"You will not tell me that you can beat Sarah Palin?" Walters pressed.

"What I'm saying is I don't think about Sarah Palin," the president confessed.

"Obviously Sarah Palin has a strong base of support in the Republican Party and I respect those skills," Obama continued. "But I spend most of my time right now on how I can be the best possible president. And my attitude has always been, from the day I started this job that if I do a good job and if I'm delivering for the American people the politics will take care of itself."

"If I falter and the American people are dissatisfied, then I'll have problems," he said.

But Obama didn't convince Good Morning America host George Stephanopoulos. "I don't think the president's telling the entire truth there," Stephanopoulos told ABC's Robin Roberts following a clip of the Obama interview. "He thinks a little bit about Sarah Palin."

Walters had gotten the debate started in an interview with Palin that aired earlier in the week.

"If you ran for president, could you beat Barack Obama?" Walters asked Palin.

"I believe so," Palin admitted.

While Palin told Walters she was undecided about whether to run in 2012, the British newspaper Guardian reported Sunday that her staff has been scouting for office space in Iowa.

"In the course of making arrangements for that tour, two aides organising Palin's visit to Des Moines on November 27 told locals they were looking into office space and other logistical needs for the coming year," the Guardian observed.