Media tycoon Berlusconi, 72, famous for his gaffes, made the remark while in Moscow visiting Russian President Dmitry Medvedev and said Obama was 'young, handsome and tanned'.
The Italian PM in the past has come out with priceless howlers, including labelling one German MEP a 'prison of war camp guard' and saying that the 'West was superior to Islam'.
Last night, as he was condemned from all sides for his remarks on Obama, a rattled Berlusconi snapped: 'What's the problem? It was a compliment. If these people don't have a sense of humour then it's their problem,' he said, according to Ansa news agency.
Only 'imbeciles' would interpret his comments as derogatory, Berlusconi was quoted as saying by Ansa.
The website of top-selling Italian daily La Repubblica said: 'Right on cue comes the first almighty gaffe - which risks to outshine even the German MEP one.'
Permatanned Berlusconi had been slammed by Italian opposition MP Dario Franceschini who said: 'He needs to apologise straight away. The best theory is that he can no longer control himself. continues here
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