Sarkozy made his comments on the sidelines of the G20 summit in Cannes, France, last week.
They were overheard by a number of journalists, but were only made public by French news website Arrêt sur images Tuesday.
According to its report, the exchange began with Obama reproaching Sarkozy for not informing him that France would vote in favor of making Palestine a member of UN cultural agency UNESCO, a move the US opposed.
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Then the conversation turned to Israel and Prime Minister Netanyahu:
"I can't stand him, he's a liar," said Sarkozy.
"You're fed up with him - I have to deal with him everyday!" replied Obama.
Obama subsequently asked Sarkozy to encourage the Palestinians to hold off their bid for a seat at the United Nations, Arrêt sur images reported.
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The exchange took place in a closed room, the website explained, while journalists were waiting outside for a press conference. One member of staff told them that headsets would not be handed out until the conference was due to begin - since they would have enabled journalists to overhear the private conversation currently underway.
Around six journalists promptly took out their own headphones and plugged them in.
They were able to listen in on the exchange for several minutes before the official communication services noticed the mistake.
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None of the remarks was recorded. A Reuters journalist was present and can confirm the report, the news agency said.
Reporters agreed to hold off publishing the sensitive remarks as part of an unwritten code of conduct, one journalist told Arrêt sur images.
Spokespeople for Sarkozy and Netanyahu declined to comment, added the Guardian.
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