"The president stated that when a leader’s only means of staying in power is to use mass violence against his own people, he has lost the legitimacy to rule and needs to do what is right for his country by leaving now," it said.
The White House statement, and another shortly after by Secretary of State Hillary Clinton, appeared to signal that the administration was going on a diplomatic offensive after holding back for days while US citizens were being evacuated from Libya.
"Moammar Qadhafi has lost the confidence of his people and he should go without further bloodshed and violence," Clinton said, using an alternate spelling for Kadhafi.
"The Libyan people deserve a government that is responsive to their aspirations and that protects their universally recognized human rights."
The US move came as Kadhafi hunkered down in Tripoli for what many feared would be a bloody showdown with rebels that have taken control of large areas of the oil-rich North African country.
The Libyan leader's son, Seif al-Islam Kadhafi, earlier told Al-Arabiya television that the crisis had "opened the doors to a civil war."
As the impasse deepened, thousands of foreign workers were trying to flee the country, embassies closed their doors and the UN Security Council met to decide how to punish Kadhafi for attacks on civilians believed to have left more than 1,000 dead.
The White House said Obama and Merkel "discussed appropriate and effective ways for the international community to respond."
"The president welcomed ongoing efforts by our allies and partners, including at the United Nations and by the European Union, to develop and implement strong measures," the statement read.
On Friday, Obama announced unilateral sanctions targeting Kadhafi and his inner circle in a move intended to encourage defections and peel away loyalists defending the Libyan's 42-year rule.
These included orders to seize Kadhafi family assets in the United States and travel bans.
Clinton said she had signed an order revoking the US visas of Libyan officials and others linked to the violence against civilians. She said new visas would be denied as a matter of policy.
The US intelligence agencies, meanwhile, were ordered to gather information on atrocities that could be used as evidence, and the US financial system was told to watch out for movements of funds from Libya.
"We are moving quickly on a series of steps to hold the Libyan government accountable for its violation of human rights and to mobilize a strong response from the international community," Clinton said.
"Consistent with the president's guidance, we will continue to look at the full range of options to hold the Libyan government accountable and support the Libyan people," she said.
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