Obama, however, did not speak anything on the USD 1.3 billion annual military aid to Egypt.
In his first public statement on the crisis, he said the US will cancel its joint military exercise planned for next month because of the rising violence in Egypt.
The Bright Star military exercise has been a centerpiece of the countries' military relations for decades.
His remarks came a after over 525 people were killed in the deadliest crackdown by security forces on supporters of 62-year-old Morsi, who was ousted by the Egyptian army on July 3 after a series of countrywide protests against his regime.
"While Mohammed Morsi was elected president in a democratic election, his government was not inclusive and did not respect the views of all Egyptians. We know that many Egyptians, million of Egyptians, perhaps even a majority of Egyptians, were calling for a change in course," he said, adding he understands the "complexity" of Egyptian politics.
Meanwhile, a defiant Muslim Brotherhood, which was earlier led by Morsi, has vowed to bring down the military- backed government and called for a massive anti-regime rally.
Secretary of State John Kerry has already condemned the clashes between Egypt's military and supporters of Morsi.
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