The Hague, Netherlands (CNN) - President Barack Obama on Tuesday defended his response to Russia's military led annexation of the Crimean peninsula from Ukraine.
At a news conference after a nuclear security summit in the Netherlands, Obama noted that Moscow could face further sanctions should Russian forces invade other parts of Ukraine.
He issued a warning to Russian President Vladimir Putin.
"He just has to understand there is a choice to be made here," Obama said.
The President's remarks came one day after the group of industrialized nations effectively suspended Russia's membership over the Crimea matter, meaning the G8 is again the G7.
Obama rejected the notion of his 2012 election rival, former Massachusetts Gov. Mitt Romney, that Russia is the top geopolitical foe of the U.S, adding he is more worried about a "nuclear weapon going off in Manhattan."
"Russia is a regional power that is threatening some of its immediate neighbors," Obama said, adding Moscow's actions are "not out of strength but out of weakness."
He argued the fate of Crimea is "not a done deal," even as he agreed Russia controls the situation on the ground.
While Obama has ruled out military action in Ukraine and agreed Russia will not be dislodged by force from the occupied peninsula, he suggested economic sanctions could prompt Putin to reverse course.
A senior administration official said the President was not discussing intelligence when he made the remark about a nuclear weapon going off in Manhattan. He was referring to his concern about nuclear terrorism, one of the key reasons for this week's summit.
A spokesman for the nuclear summit said the leaders gathered at The Hague were presented a fictitious dirty bomb scenario that would test their crisis management skills.
Each of the leaders participated in a two- to three-minute scenario that took place in a made up city.
The leaders were given a tablet and they anonymously played, given four options and then asked what they would do.