In a wide-ranging speech about Middle East policy on Thursday, Obama touched on the fierce Syrian crackdown against the street demonstrations that have rippled across the country since mid-March.
Obama told an audience at the State Department that Syrians have displayed "courage in demanding a transition to democracy" but the regime "has chosen the path of murder and the mass arrests of its citizens."
"President Assad now has a choice: He can lead that transition, or get out of the way. The Syrian government must stop shooting demonstrators and allow peaceful protests; release political prisoners and stop unjust arrests; allow human rights monitors to have access to cities like Daraa; and start a serious dialogue to advance a democratic transition. Otherwise, President Assad and his regime will continue to be challenged from within and isolated abroad," he said.
He also said that Syria has sought help from Iran "in the tactics of suppression."
"This speaks to the hypocrisy of the Iranian regime, which says it stand for the rights of protesters abroad, yet suppresses its people at home. Let us remember that the first peaceful protests were in the streets of Tehran."
Obama's speech was aired on Syrian state television.
On Wednesday, Obama imposed new sanctions against al-Assad and those around him, and earlier Thursday, Syria denounced the move, state TV reported.
"The measures by the United States are one in a series of sanctions imposed by the consecutive American administrations against the Syrian people, as part of its regional plans, whose priority is to serve the Israeli interest," state-run Syrian TV reported.
"Any hostile act against Syria is an American contribution to the Israeli aggression against Syria and the Arabs."
The sanctions also target two top Iranian officials whose unit was a "conduit for Iranian material support" to Syrian intelligence, according to a copy of Obama's executive order issued by the White House.
But, the Syrian TV report said, "the sanctions have not and will not affect Syria's independent decision making, and its resistance in the face of continuous American attempts to control its national decision making and the completion of comprehensive reform."
Hezbollah, the Shiite militant movement based in Lebanon, also blasted the U.S. sanctions toward Syria, saying the United States is "settling a score with Syria and its leadership for its commitment to the choice of resistance and its objection against the Israeli occupation and the American hegemony, and its rejection to obey the American-Israeli dictates."
It ridiculed U.S. claims to protect the freedoms of Arabs, citing bloodshed in Iraq and Afghanistan and Israel's "crimes" in the Palestinian territories, Lebanon and the Golan Heights, which Israel seized from Syria during the Six Day War in 1967.
"We are confident that this blatant American intervention and exercising of pressure and the instigation will not prevent the Syrian people and its leadership from keeping their national commitments towards the rightful causes of the nation and at its front the Palestinian cause, and the struggle with the Israeli enemy and the rejection of American occupation of Arab and Muslim lands."
Obama's speech touched a range of Middle East-North Africa flashpoints -- including Egypt, Tunisia, the Israeli-Palestinian peace process, Yemen, Bahrain, and Libya.
The speech came nearly two years after Obama delivered an address in Cairo, the Egyptian capital, calling for "a new beginning" between the United States and the Muslim world.
On Sunday, clashes between pro-Palestinian protesters and Israeli forces erupted along Israel's borders and occupied territories, leaving at least 12 dead on a Palestinian mourning day marking the birth of the Jewish state.
Two protesters were killed and 170 were wounded Sunday when fighting broke out in the Golan Heights area, the state-run Syrian Arab News Agency said. And at least 10 were killed and 112 others were injured in clashes along the line of demarcation with Lebanon, Lebanon's state news agency reported.
An Israeli military spokeswoman said troops fired on demonstrators who were illegally crossing from Lebanon and Syria and damaging "security infrastructure." But Syrian and Lebanese officials criticized what they said were Israeli attacks, state media reported.
Israel's military accused Syria of inciting a crisis to divert attention from its own clampdown on anti-government demonstrations. Ten Israeli soldiers and three officers were injured in the clashes, the Israel Defense Forces reported.