"We will continue to send a clear message: The violence must stop. Moammar Gadhafi has lost his legitimacy to lead and he must leave," Obama said Thursday during a joint news conference with Mexican President Felipe Calderon. "The (Libyan people's) aspirations of freedom, democracy and dignity must be met."
Obama also warned others in Gadhafi's regime, such as military leaders and the strongman's backers, will be held accountable for taking actions that endanger the lives of Libyans protesting against their government.
"Those around him must understand that the violence they perpetrate against innocent civilians will be monitored and they will be held accountable for it," Obama said. "They should know history is moving against Col. Gadhafi."
The president said the appropriate people within his administration were looking at "a full range of options," including imposing a no-fly zone over Libyan airspace.
"I don't want us (to be) hamstrung," Obama said. "I want us to be making our decision based on what's best for the Libyan people in consultation with the international community."
As tens of thousands of people flee the escalating violence between the military and the rebels, Obama commended the governments of Tunisia and Egypt -- both of which saw long-time leaders ousted this year -- for welcoming refugees into their countries.
He said he approved the use of military aircraft to help return Egyptian refugees to Egypt, and authorized the U.S. Agency for International Development to charter civilian aircraft to help other refugees "find their way home."
U.S. AID also will send humanitarian aid to refugee camps, he said.
Obama also thanked Mexico for its role in getting Libya removed from the U.N. Human Rights Council.
Calderon said the United States was to be commended for its efforts against the Gadhafi government.
"It is not possible that civilians be massacred and (the perpetrators) go unpunished," Calderon said through a translator. "We must do everything we can to avoid or stop that massacre."
The two leaders announced Thursday that Mexico and the United States have found "a clear path" to resolving the years-long, cross-border, long-haul trucking dispute over Mexican drivers crossing the border and using U.S. highways. Obama said the effort would strengthen safety, remove tariffs, expand trade and create jobs.
Obama and Calderon also said they were working to improve trade, immigration issues and climate-change matters.
Both praised what Obama called "the extraordinary effort" of agents and citizens in Mexico's war on drugs.
"I have reaffirmed to President Calderon that Mexico has a full partner in the United States," Obama said. "Our people, whether in Texas or Tijuana, have a right to be safe in their communities."
He also said the United States also accepts responsibility for its role in the drug war, which Calderon said was appreciated.
"We know we need to be personally involved so the objectives we raised (today) are reached," Calderon said.
They also discussed the death of U.S. Immigration and Customs Enforcement agent Jaime Zapata by alleged drug gunmen on a Mexican highway. Calderon said Mexican authorities have a suspect in custody and Obama said extradition papers have been filed.
"We have to be careful about how we care for all agents," Calderon said, "We have to seek much more creative solutions" to combat drug violence.