"The possibility of lethal defensive weapons is one of those options being examined," the president confirmed during a joint press conference with German Chancellor Angela Merkel. "I want to emphasize that a decision has not yet been made."
In the meantime, he said, the U.S. and Europe will continue to push for a diplomatic solution.
"The 21st century cannot have us stand idle and simply allow the borders of Europe to be redrawn at the barrel of the gun," Obama warned.
Merkel -- who has been working with French President Francois Hollande to broker peace between Russian President Vladimir Putin and Ukrainian President Petro Poroshenko -- made it clear that she opposes arming Ukraine.
"I've always said I don't see a military solution to this conflict," she said today. "We have to put all our efforts in bringing about a diplomatic solution."
"Both Angela and I have emphasized that the prospect for a military solution to this problem is always been low," President Obama said. "My hope is that through diplomatic efforts, those costs have become high enough that Mr. Putin’s preferred option is for a diplomatic solution. "
Putin is expected to meet with Poroshenko, Hollande, and Merkel in Belarus on Wednesday to discuss a tentative peace plan, similar to the one that crumbled shortly after it was signed in September.
If diplomacy fails once again, "there may be some areas where there are tactical agreements, there may not be," the president acknowledged. But "we have to show them that the world is unified in imposing a cost for this aggression."
In a wide-ranging talk, President Obama also said it was time for Iran to "make a decision" about whether to move forward with a nuclear deal.
"At this juncture, I don't see a further extension being useful if they have not agreed to the basic formulation and the bottom line that the world requires to have confidence that they're not pursuing a nuclear weapon," he told reporters.
The president also spoke about Israeli Prime Minister Benjamin Netanyahu's upcoming address to Congress, which was arranged without White House consultation.
"We have a practice of not meeting with leaders right before their elections, two weeks before their elections," he explained. "I think it's important for us to maintain these protocols ... to make sure that it doesn't get clouded with what could be perceived as partisan politics."