"I've got Muslims who are fighting in Afghanistan in the uniform of the United States armed services," he said. "They're out there putting their lives on the line for us, and we've got to make sure that we are crystal clear, for our sakes and their sakes, they are Americans, and we honor their service."
"And part of honoring their service is making sure that they understand that we don't differentiate between them and us," he added. "It's just us."
The president made the comments in reference to a question about the planned Islamic cultural center near Ground Zero and the possible burning of copies of the Quran by fringe Florida pastor Terry Jones, both of which have been tied to a spike in anti-Islam sentiment in the United States.
On the former issue, the president said Islam should be treated no differently than any other religion.
"This country stands for the proposition that all men and women are created equal, that they have certain inalienable rights," he said. "One of those inalienable rights is to practice their religion freely. And what that means is that if you could build a church on a site, you could build a synagogue on a site, if you could build a Hindu temple on a site, then you should be able to build a mosque on a site."
He added that while "I recognize the extraordinary sensitivities around 9/11," it is important to remember that "we are not at war against Islam."
"We're at war against terrorist organizations that have distorted Islam or falsely used the banner of Islam to engage in their destructive acts," he said. "And we've got to be clear about that. We've got to be clear about that because...if we're going to successfully reduce the terrorist threat, then we need all the allies we can get."
"The folks who are most interested in a war between the United States or the West and Islam are Al Qaida," Mr. Obama continued. "That's what they've been banking on."
The president said " the overwhelming majority" of Muslims have the same concerns as everyone, and that Muslim Americans are friends, neighbors and coworkers.
He added: "And, you know, when we start acting as if their religion is somehow offensive, what are we saying to them?"
More from the press conference:
Brian Montopoli is a political reporter for CBSNews.com. You can read more of his posts here. Follow Hotsheet on Facebook and Twitter.