The Dalai Lama took centre stage on Saturday at an anti-terror summit with Muslim clerics and other religious leaders from around the world.
Tibet's spiritual leader came in response to a prominent California imam's invitation to help form a "United Nations of Religion" devoted to countering extremist violence.
Imam Seyed Mehdi Khorasani said the idea came after he met Dalai Lama Tenzin Gyatso in the US state of Idaho late last year.
Religious leaders and scholars from approximately 30 countries were brought to San Francisco, which Khorasani said was selected because it was where the United Nations was founded.
Organisers heralded the assembly as the establishment of a multi-religious body that will work to quell violence and promote harmony between people of different faiths.
The Dalai Lama said: "Nowadays, to some people, the Muslim tradition appears more militant. I feel that's totally wrong. Muslim, like any other tradition, is the practice of compassion."
He said suicide bombings and other violence by extremists have unfairly skewed the world's perception of Islam.
"Such mischievous people are not just in the Muslim community, but among the Hindus, the Christians, the Buddhists. In any community, a few mischievous people are always there."
The Dalai Lama urged the leaders of all faiths to stand together on their common ground to defend Islam and promote the ideal of respecting the faiths of individuals while embracing religious diversity in communities.
He said: "In some respects, I am one of the defenders of Muslim tradition. If one believer, one tradition, is getting criticism, we have to act.
"I feel, this moment, we Buddhists and other traditions must come together."