Dozens of southern French resorts banned the full body swimsuit from beaches this summer, but the country's constitutional court ruled that the garment did not break laws on secularism or pose a security risk.
Hollande said: "I don't want to give Islamists reasons to put pressure through provocation to test the limits of the French Republic. Nor will I give them a pretext to take offence at the stigmatisation of Muslims."
He told allies and journalists at the Wagram hall, named after a famous Napoleonic victory: "While I'm President, I will pass no knee-jerk law that would be as inapplicable as it would be unconstitutional. It is my deep conviction that our laws are sufficient, we simply need to apply them in all their rigour and effectiveness."
Hollande warned that secularism was not a "state religion" to be used against other beliefs and that it was as compatible with Islam as with Christianity and Judaism.
"Can Islam accept the separation of faith and law that is the very basis of secularism? My response is yes, clearly yes. The immense majority of our Muslim compatriots today give us daily proof by practising their faith without any threat to public order," he said.
"The question the Republic must answer is: Is it really ready to make place for a religion that it did not expect to be this big over a century ago. There too, my answer is yes, certainly."
Sarkozy this month called for a "merciless" response to terrorist attacks and said "legal niceties" should not hamper the fight against terror.
Without mentioning his rival by name, Hollande said: "Constitutional principles are not legal niceties.
"Is the freedom to come and go a legal nicety? Is freedom of expression a legal nicety?"
An opinion poll published by Elabe on Thursday suggested almost nine out of 10 voters were against the President seeking a second five-year term. They voiced deep dissatisfaction on security and the economy.