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Obama did not describe the "range of options" he is considering to fight the Islamic State in Iraq and the Levant, or ISIL, a group he described as "vicious" and a "terrorist organization" that could eventually pose a threat to Americans.
He said Iraqi leaders needed to set aside sectarian differences to deal with the threat, and said the United States would engage in "intensive diplomacy" in the region to try to prevent the situation from worsening.
"The United States is not simply going to involve itself in a military action in the absence of a political plan by the Iraqis that gives us some assurance that they are prepared to work together," Obama told reporters at the White House.
He said he was concerned that ISIL could try to overrun Shi'ite sacred sites, creating sectarian conflicts "that could be very hard to stamp out." The rebels are Sunni Muslims and the Baghdad government of Prime Minister Nuri al-Maliki is dominated by Shi'ites.
"This is a regional problem, and it is going to be a long-term problem. And what we're going to have to do is combine selective actions by our military to make sure that we're going after terrorists who could harm our personnel overseas or eventually hit the homeland," Obama said.
Obama said he wanted to review intelligence on the situation in Iraq so that any U.S. actions are "targeted, they are precise, and they are going to have an effect."
He also said he would consult with the U.S. Congress, where Republicans have been critical of Obama for failing to negotiate a deal with Iraq under which the United States would have left a small force there after pulling out troops at the end of 2011.
Obama's fellow Democrats are reluctant to see military intervention after the lengthy war, which began with the 2003 U.S.-led invasion to topple President Saddam Hussein.
"Look, the United States has poured a lot of money into these Iraqi security forces," Obama told reporters before leaving on a previously scheduled trip to North Dakota. He was scheduled to spend the weekend in California.
Obama was expected to talk to foreign leaders about the situation over the weekend, White House spokesman Josh Earnest told reporters traveling with Obama on Air Force One.
Earnest said the Obama administration had not yet discussed potential interventions with Iran, Iraq's neighbor to the east and a backer of Maliki.
Obama said the insurgency so far had not caused major disruptions to oil supplies from Iraq, but that if insurgents took control of refineries, other oil producers in the Middle East would need to help "pick up the slack."
"That will be part of the consultations that will be taking place during the course of this week," Obama said.