"Nations need to break the cycles of conflict, especially sectarian conflict, that have become magnets for violent extremism," Obama said at a White House Summit on Countering Violent Extremism.
"Countering violent extremism begins with political, civic and religious leaders rejecting sectarian strife," he told representatives from over 70 countries at the summit attended by India.
The Indian delegation, according to the White House, is represented by R N Ravi, Chairman of the Joint Intelligence Committee.
"These terrorists are desperate for legitimacy. And all of us have a responsibility to refute the notion that groups like ISIL somehow represent Islam, because that is a falsehood that embraces the terrorists' narrative," he said.
"We must acknowledge that groups like al Qaida and ISIL are deliberately targeting their propaganda to Muslim communities, particularly Muslim youth," he said.
He said Muslims, including scholars and clerics, have a responsibility to push back not just on Islam's twisted interpretations, but also on the "lie that we are somehow engaged in a clash of civilisations."
Obama said governments have an important role to play in this.
"At minimum, as a basic first step, countries have a responsibility to cut off funding that fuels hatred and corrupts young minds and endangers us all. We need to do more to help lift up voices of tolerance and peace, especially online," he said.
"So the United States will do more to help counter hateful ideologies. And today, I urge your nations to join us in this urgent work," he said.
Secretary of State John Kerry said in the face of ISIL's rise, Obama has decided to mobilise a global coalition to confront the network of murderers and thugs, a coalition that today includes more than 60 countries working along multiple lines of effort to degrade and destroy ISIL.
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