He said co-operation could not continue while civilians were being killed.
Egypt's interior ministry has now stated that police are authorised to use live ammunition in self-defence.
On Wednesday security forces broke up two camps of Muslim Brotherhood protesters who were demanding President Mohammed Morsi's reinstatement. More than 500 people were killed nationwide.
The protesters had been staging sit-ins for weeks about the army's overthrow of Mr Morsi in July.
The UN Security Council is to meet in emergency closed session later on Thursday in New York.
Meanwhile, the US State Department has warned US citizens not to travel to Egypt and says those living there should leave.
Clashes
In the latest violence on Thursday, hundreds of Brotherhood members set fire to a government building near Cairo.
President Obama: "Our traditional co-operation cannot continue as usual while civilians are being killed"
Local TV footage showed firefighters bringing employees out from the building - which housed the offices of the Giza local government.
State-run Nile News TV also reported clashes between Brotherhood members and residents in a suburb of Egypt's second city, Alexandria.
Seven Egyptian soldiers were shot dead by unknown gunmen near the city of el-Arish in the Sinai region, according to security forces.
The government says 525 people died nationwide on Wednesday, but the final toll is likely to be significantly higher.
Scores of bodies have not been registered, because the official count only includes bodies which have passed through hospitals.
The BBC has seen 202 bodies wrapped in shrouds at the Eman mosque, close to the main protest camp at Rabaa al-Adawiya Square.
Most of these are unlikely to have been counted in the official toll. The BBC's Middle East editor Jeremy Bowen says many have been burned beyond recognition.
The Muslim Brotherhood insists that more than 2,000 people died. It says 300 bodies were taken to the Eman mosque, and other bodies were taken to sports halls.
Reports speak of disputes between bereaved relatives and officials entrusted with documenting the causes of death.
The interior ministry has now instructed police to use live ammunition in dealing with attacks on themselves and government buildings.
During Wednesday's clashes, it insisted its forces only used tear gas, despite witnesses saying they saw live ammunition being fired.
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