U.S. President Barack Obama is warning city leaders they will be held accountable for how federal dollars from the $787 billion economic stimulus package are spent.

Mr. Obama was speaking to the U.S. Conference of Mayors at the White House Friday.

President Obama and Cabinet leaders met with 80 mayors from across the country to discuss how the stimulus plan will affect their communities.

President Obama told the mayors that stimulus funds must be used for their intended purposes and without waste, inefficiency or fraud.  He warned if a local government does not do that, he will use the full power of his office to stop it.

The leader of the U.S. Conference of Mayors, Miami Mayor Manny Diaz, said city officials welcome accountability.

The meeting comes one day after Mr. Obama named a director, Adolfo Carrion Jr., for the new White House Office of Urban Affairs, which the president said will help ensure federal dollars targeting urban areas are well spent.

President Obama said the office will focus on job creation, improving housing and infrastructure, and creating new ways to make the country more globally competitive.

The president said rebuilding the economy is going to require a partnership between mayors and the White House.

Separately, Mr. Obama and first lady Michelle Obama will host a dinner for the nation's governors at the White House on Sunday.  A White House statement said the president's home is a place where the bond between Americans is strengthened.