Mr Obama said errors had emerged in the process of collecting and sharing intelligence on extremists and in the homeland security system that could have prevented the attack on a packed Northwest jet heading into Detroit.
“A systemic failure has occurred and I consider that totally unacceptable,” Mr Obama said in a blunt statement, breaking his Hawaii vacation for a second straight day to update Americans on the incident.
“There was a mix of human and systemic failures that contributed to this potential catastrophic breach of security,” Mr Obama said.
“We need to learn from this episode and act quickly to fix the flaws in our system because our security is at stake and lives are at stake.”
Mr Obama's remarks came as the White House hit back at the perception that the president was disengaged, as he enjoys a break away from Washington in his native Hawaii.
He particularly cited the fact that the attacker, Umar Farouk Abdulmutallab, who tried to blow up the jet with concealed explosives, had been linked with extremism, but was still allowed to board the plane.
The president, speaking on a Marine Base near his Hawaii vacation home, said two reviews he had already commissioned on the incident would report preliminary findings to the White House this week.
But the probes had already unearthed “serious concerns” and “deficiencies”, he said.
“I will do everything in my power to support the men and women in intelligence, law enforcement and homeland security to make sure they've got the tools and resources they need to keep America safe,” Mr Obama said.
“But it's also my job to ensure that our intelligence, law enforcement and homeland security systems and the people in them are working effectively and held accountable.
“I intend to fulfill that responsibility and insist on accountability at every level.”