Mr Obama said: “As a citizen, and as president, I believe that Muslims have the same right to practice their religion as everyone else in this country.
“That includes the right to build a place of worship and a community centre on private property in lower Manhattan, in accordance with local laws and ordinances.
“This is America, and our commitment to religious freedom must be unshakable.”
Congressman Peter King, who represents New York in the US House of Representatives, said the Muslim community was “abusing” its rights and “needlessly offending” many people.
He said: “It is insensitive and uncaring for the Muslim community to build a mosque in the shadow of Ground Zero.