It came a day after the so-called "Islamic State," which has seized much of eastern Syria and northern Iraq, released a video showing a masked militant beheading US reporter James Foley, provoking worldwide revulsion and condemnation.
As US jets continued to strike IS targets in Iraq, despite a threat to kill a second American reporter, Obama said: "When people harm Americans anywhere, we do what's necessary to see that justice is done."
Shortly after he spoke, the State Department asked for 300 more US troops to be sent to Iraq to protect US facilities.
In the video, a black-clad man said that Foley, a 40-year-old freelance journalist kidnapped in northern Syria in November 2012, had been killed to avenge US air strikes against his movement.
The man then paraded a second US reporter, Steven Sotloff, before the camera and said he too would die unless Obama changes course.
In a day of fast-moving developments, the White House and the Pentagon said US military forces had "recently" tried to rescue "a number" of American hostages held in Syria by IS, but had failed.
"This operation involved air and ground components and was focused on a particular captor network within ISIL (IS)," Pentagon spokesperson Rear Admiral John Kirby said in a statement.
"Unfortunately, the mission was not successful because the hostages were not present at the targeted location."
It was not immediately clear if either reporter was the target of the rescue mission.
Obama "authorised action at this time because it was the national security team's assessment that these hostages were in danger with each passing day in ISIL (IS) custody," a White House statement added.
Earlier, Obama paid tribute to Foley and said the Islamic State must be defeated.
"Jim Foley's life stands in stark contrast to his killers," he said, branding the militants genocidal murderers who target civilians and subject women and children to "torture and rape and slavery."
"Their victims are overwhelmingly Muslim and no faith teaches people to massacre innocents," he said, dismissing the IS claim to represent the aspirations of a global Muslim caliphate.
"No just God would stand for what they did yesterday and what they do every single day," he declared.
"We will be vigilant and we will be relentless... From governments and peoples across the Middle East, there has to be a common effort to extract this cancer so it does not spread."
US intelligence believes the video is genuine, and the British government held a crisis meeting to launch an investigation because Foley's executioner spoke English with a London accent.
"We have not identified the individual responsible, but from what we have seen, it looks increasingly likely that it is a British citizen," Prime Minister David Cameron told reporters. "This is deeply shocking."
Foley's parents, John and Diane, appeared on the lawn of their home in New Hampshire to pay tribute to their son - the oldest of five adult children - and call for other hostages to be released.
"Jim would never want us to hate or be bitter. We cannot do that and we are just so very proud of Jimmy and we are praying for the strength to love like he did," Diane said.
US Central Command said 14 air strikes had been carried out on IS targets in Iraq in the 24 hours since the video was released.
The United Nations and Europe's top powers condemned the killing, and France warned the world faces the "most serious international situation" since 2001, the year of the September 11 attacks.
In a significant shift from its usual policy, Germany said it was ready to send weapons to support Iraqi Kurds against IS.
In the nearly five-minute video, Foley is seen kneeling on the ground, dressed in an orange outfit that resembles those worn by prisoners held at the US naval base at Guantanamo Bay.
"Any aggression toward the Islamic State is an aggression toward Muslims from all walks of life who have accepted the Islamic caliphate as their leadership," the masked militant declares.
In June, the group then known as the Islamic State in Iraq and the Levant declared the dawn of a Muslim caliphate and seized control of a swath of eastern Syria and northern Iraq.
This month, Obama reacted by ordering US warplanes to counter threats to US personnel in the Kurdish regional capital Arbil or to civilian refugees from Iraqi religious minority groups.
He has insisted the scope of the strikes would remain limited, but Iraqi officials and observers have argued only foreign intervention could turn the tide on militant expansion in Iraq.
Shia militias, federal soldiers, Kurdish troops and Sunni Arab tribes have been battling IS for weeks in some areas but have been unable to clinch a decisive victory.
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President Obama yesterday in his statement said: “Today, the entire world is appalled by the brutal murder of Jim Foley by the terrorist group ISIL. Jim was a journalist, a son, a brother and a friend. He reported from difficult and dangerous places, bearing witness to the lives of people a world away. He was taken hostage nearly two years ago in Syria, and he was courageously reporting at the time on the conflict there. Jim was taken from us in an act of violence that shocked the conscience of the entire world. He was 40 years old, one of five siblings, the son of a mom and dad who worked tirelessly for his release. Earlier today, I spoke to the Foleys and told them that we are all heartbroken at their loss and join them in honoring Jim and all that he did. Now, Jim Foley’s life stands in stark contrast to his killers.
Let’s be clear about ISIL. They have rampaged across cities and villages killing innocent, unarmed civilians in cowardly acts of violence. They abduct women and children and subject them to torture and rape and slavery. They have murdered Muslims, both Sunni and Shia, by the thousands. They target Christians and religious minorities, driving them from their homes, murdering them when they can, for no other reason than they practice a different religion. They declared their ambition to commit genocide against an ancient people. So ISIL speaks for no religion. Their victims are overwhelmingly Muslim, and no faith teaches people to massacre innocents. No just god would stand for what they did yesterday and what they do every single day. ISIL has no ideology of any value to human beings. Their ideology is bankrupt. They may claim out of expediency that they are at war with the United States or the West, but the fact is they terrorize their neighbors and offer them nothing but an endless slavery to their empty vision and the collapse of any definition of civilized behavior.”
Abdul Quddus DET – U.S. Central Command www.facebook.com/centcomurdu
How long such mindless acts would be justified as retaliation to a crime committed by the other party? We may not support motives and actions of either US or the ISIS. But that does not mean we condone such heinous crimes as a 'lesson-taught'.
Violence by anyone should be condemned, whether by US or militants claiming to uphold Islamic faith. Ultimately those that are suffering are poor Iraqis, Kurds, Yazidis, Syrians and the slain journalists family.
@Nigel: So you don't think the PM of the Brits is qualified to determine whether someone is British?
What you sow, so shall you reap....
@Nigel: You my friend are fooling yourself.......get real.
US should go ahead and demolish these ISIS thugs. They deserve to be exterminated asap otherwise they may spread this cruelty to other places.
Was toppling Saddam Hussain and invading Iraq .......such a good idea ?
I object to these terrorists being called British . . . they are muslim immigrants or the sons of muslim immigrants . . . except for a scrap of paper there is nothing about them that any sane person would call British.