The two leaders met in late morning before joining officials from their governments at lunch. They also held a mid-afternoon news conference, Mr. Clinton's first since his acquittal on impeachment charges.
The president said during a morning photo opportunity with Chirac that the situation in Kosovo will be at the top of their agenda for discussions.
Chirac said through an interpreter that he hopes a peace deal is reached or all the people in Kosovo will have to bear the consequences.
If both sides at the talks in France don't reach an agreement, NATO has threatened air strikes.
"I just wanted to take this opportunity to welcome President Chirac and the members of his delegation back to the White House," Mr. Clinton said. "We have had a good working relationship and a warm, personal friendship. I'm delighted to see him."
Also among the topics the two leaders were discussing are efforts to reform the international financial system, hit by crises over the past 20 months. Chirac wants to hold a monetary summit in Paris in the fall to adopt such reforms.
U.S. and French officials have said Mr. Clinton and Chirac also were to discuss NATO's 50th anniversary celebrations in Washington in April. France is concerned that if the meeting turns into a Cold War victory party, it could anger Russia.
On Iraq, the two leaders agree President Saddam Hussein is responsible for the situation the country finds itself in, but Chirac wants to lift the U.N. oil embargo, provided Baghdad agrees to weapons inspections.
Chirac spent Thursday meeting with the heads of the International Monetary Fund, the World Bank and the Inter-American Development Bank, advancing his ideas on reforming the international financial system.
Chirac's trip comes ahead of a meeting Saturday in Germany of finance ministers from the world's wealthiest nations, who will discuss the same topics.