Imam Feisal Abdul Rauf told CNN that the discourse surrounding the center has become so politicized that moving it could strengthen the ability of extremists abroad to recruit and wage attacks against Americans, including troops fighting in the Middle East.
"The headlines in the Muslim world will be that Islam is under attack," he said, but he added that he was open to the idea of moving the planned location of the center, currently two blocks north of the World Trade Center site.
"But if you don't do this right, anger will explode in the Muslim world," he later said, predicting that the reaction could be more furious than the eruption of violence following the 2005 publication of Danish cartoons of the Prophet Muhammad.
Opponents say the center, which would include a Sept. 11 memorial and a Muslim prayer space, should be moved farther away from where Islamic extremists destroyed the World Trade Center and killed nearly 2,800 people. Supporters say religious freedom should be protected.
Rauf, 61, has largely been absent since the debate over the center erupted earlier this year. He has been traveling abroad, including taking a State Department-funded 15-day trip to the Middle East to promote religious tolerance.
In the interview with CNN's Soledad O'Brien, his first since returning to the U.S. on Sunday, Rauf responded to a number of questions that have been raised about the project.
He said money to develop the center would be raised domestically for the most part.
"And we'll be very transparent on how we raise money," he said, adding that no funds would be accepted from sources linked to extremists.
Rauf said that, in retrospect, he might have chosen a different location for what he described as a multifaith community center.
"If I knew this would happen, if it would cause this kind of pain, I wouldn't have done it," he said.