He said that this would strike a "major blow to global peace and security".
"So today is an opportunity not simply to talk, but to act," Obama said.
"Not simply to make pledges, but to make real progress for the security of our people."
Obama urged world leaders to make a historic decision against what he called the world's greatest security threat.
The White House said on Tuesday that the US, Canada and Mexico have agreed to work together with the International Atomic Energy Agency (IAEA) to downgrade a Mexican research reactor from using high to low enriched uranium fuel.
The move will allow the removal of all highly enriched uranium from Mexico.
Russia also said that it will spend up to $2.5bn to help dispose of weapons grade plutonium, while China agreeed to help draft new sanctions against Iran over its disputed nuclear programme.
Attending the summit are leaders and delegates from the five major nuclear powers and 42 others, in what is the largest international meeting hosted by a US president in more than 60 years.
Notable exclusions from the gathering include Iran, North Korea and Syria.
Meanwhile, Mahmoud Ahmadinejad, the president of Iran, said on Tuesday that he is drafting a letter to Obama offering talks and that Iran is Obama's "only chance" to succeed.
"Obama cannot do anything in Palestine ... What can he do in Iraq? Nothing. And Afghanistan is too complicated," Ahmadinejad said.
"The best way for him is to accept and respect Iran and enter into co-operation. Many new opportunities will be created for him."
Alireza Ronaghi, Al Jazeera's correspondent in Iran, said: "Ahmadinejad has become as soft in his tone as possible. This is unprecedented."
However, Ronaghi added that Ahmadinejad "changes his tone depending on the audience" and is likely to use the offer to say that if the US do not take it Iran will "go their own way".
Gordon Duguid, of the US state department, told Al Jazeera that Ahmadinejad's comments were not necessarily conciliatory.
"A conciliatory move would be accepting the deals that are on the table and going to the IAEA and showing that Iran’s nuclear programme is peaceful," Duguid said.
"Statements are statements, actions are actions," he said.
A day earlier, the talks were dominated by two developments – an apparent agreement between the US and China to work together on sanctions against Iran; and an announcement that Ukraine would surrender its stockpile of weapons-grade uranium.
Obama has framed the two-day summit as a key part of his broader agenda for ridding the world of nuclear weapons, and preventing weapons-grade material from falling into the hands of terrorists.
US officials hope leaders participating in the summit will agree on a series of security steps for their own nuclear material, and help pay to put the stocks of less well-off countries under lock and key.
"A conciliatory move would be accepting the deals that are on the table and going to the IAEA and showing that Iran’s nuclear programme is peaceful"
Gordon Duguid, from the US state department, on Ahmadinejad's comments
Al Jazeera's Rob Reynolds, reporting from Washington DC, said: "Obama said that in the closed session on Monday the leaders had come closest to a common understanding of the threat. That al-Qaeda taking a weapon would be catastrophic for the world order.
"But for today the first order of business is to get this communique in order.
"To get each country to commit to a set of steps that it will take individually to secure the nuclear materials within its borders or to send them somewhere else where they can be secured.
"And there will also be a lot of talk about stregnthening the IAEA.
"The IAEA director general earlier said that it needed more money from the international community."
Reynolds said that any commitment or agreement the leaders make at the meeting will not be legally binding.
Obama has set a goal of securing all vulnerable nuclear materials worldwide within four years – an objective he hopes will be endorsed by all parties attending the Washington summit, even if the means to accomplish it remain unclear.
The summit comes just days after Obama signed a new nuclear arms reduction treaty with Russia, and ahead of next month's review of the Nuclear Non-Proliferation Treaty.
A follow up summit is planned in 2012 in South Korea.