In a speech in NATO member Estonia's capital Tallinn, Obama pledged that the alliance would support countries "threatened by Russia's aggression against Ukraine", where pro-Russian separatists have seized control of eastern regions from the government in Kiev.
"Russian forces that have now moved into Ukraine are not on a humanitarian or peacekeeping mission. They are Russian combat forces with Russian weapons in Russian tanks," Efe quoted the US president as saying.
"We will not accept Russia's occupation and illegal annexation of Crimea or any part of Ukraine," Obama said during a joint press conference with his Estonian counterpart, Toomas Ilves, who has called for NATO troops to be permanently based on his country's territory.
Obama charged that Russian President Vladimir Putin "has ignored the opportunity to resolve the crisis in Ukraine diplomatically" and as a result brought international economic sanctions down on his own country.
"Capital is fleeing. Foreign investment is plummeting because investors know that today's Russia is a bad bet, given its behaviour. The Russian economy has slipped into recession. Its energy production, which is the engine of the Russian economy, is expected to drop. Its credit rating is near junk status. The rouble just fell to an all-time low," he said.
"In short, Russia's actions in Ukraine are weakening Russia. Russia's actions are hurting the Russian people."