Camp Ashraf, which came under Iraqi control Jan. 1, is home to militants who Iran and Iraq say should be expelled. The MKO is on a US list of terrorist groups.
The ex-president faces an uphill battle in June's presidential elections and must shed his 'weak' image, supporters say.
Positions that suggest little flexibility may simply be a strong opening bid by those who have the ear of Iran's leaders.
But despite their leader's message to Obama, Iranians at Tuesday's 30th anniversary rally continued to chant 'Death to America.'
Iran marks the anniversary of its 1979 Islamic revolution on Tuesday.