The deadly crackdown drew widespread condemnation from the Muslim world and the West.
Obama canceled joint U.S.-Egypt military exercises scheduled for next month, although he gave no indication that the U.S. planned to cut off its $1.3 billion in annual military aid to the country. The U.S. administration has avoided declaring Morsi's ouster a coup, which would force it to suspend the military aid.
"While we want to sustain our relationship with Egypt, our traditional cooperation cannot continue as usual when civilians are being killed in the streets and rights are being rolled back," he said, speaking from his weeklong vacation in Massachusetts.
Obama said the United States informed Egypt's interim leaders Thursday morning about plans to cancel the military exercises. The president also ordered his national security team to "assess the actions taken by the interim government and further steps that we may take as necessary with respect to the U.S.-Egyptian relationship."
The Bright Star maneuvers, long a centerpiece of the deep ties between the U.S. and Egyptian militaries, were scheduled to have lasted about three weeks. Several other countries, including Turkey, Jordan and Britain, have also participated.
The U.S. and Egypt have not held the biennial exercises since 2009, as Egypt grappled with the fallout from the revolution that ousted its longtime autocratic leaders Hosni Mubarak. Morsi, a member of the Muslim Brotherhood, was elected president in 2012 during Egypt's first democratic elections.
Despite the curfew and state of emergency, violence spilled over to a second day Thursday.
The Interior Ministry said its decision to authorize police to use deadly force came after an angry crowd stormed the governor's office in Giza, the city next to Cairo that is home to the Pyramids.
Associated Press reporters witnessed the burning buildings in Giza — a two-story colonial-style villa and a four-story administrative building, located on the road that leads to the Pyramids on the west bank of the Nile River.