WASHINGTON -- President Obama's criticism of Iran escalated Friday into an unusually personal war of words. To Iranian President Mahmoud Ahmadinejad's demand he apologize for meddling, Obama shot back that the regime should "think carefully" about answers owed to protesters it has arrested, bludgeoned and killed.

The president spoke at an East Room news conference capping his third set of meetings with German Chancellor Angela Merkel, one of several European leaders who spoke out more forcefully, more quickly than Obama on the unrest in Iran that followed the disputed June 12 elections.

"We will not forget," Merkel said.

Turning to Iraq, where a deadline for U.S. combat troops to leave all cities was just four days away, Obama offered no support for allowing a spate of recent violence to push back the withdrawal. "If you look at the overall trend, despite some of these high-profile bombings, Iraq's security situation has continued to dramatically improve," Obama said.

Of bigger concern than the violence, Obama said, is the lack of movement on laws to share oil revenue and other matters that keep Iraq deeply fractured along sectarian lines. He called on Iraqi Prime Minister Nouri al-Maliki to step up his leadership.

In Iran, the government proclaimed the incumbent hardline president, Ahmadinejad, the landslide winner of the June 12 voting over opposition leader Mir Hossein Mousavi, prompting widespread protests followed by a brutal state-led crackdown.

Ahmadinejad told Obama Thursday to "show your repentance" for criticizing Tehran's response.

"I don't take Mr. Ahmadinejad's statements seriously about apologies, particularly given the fact that the United States has gone out of its way not to interfere with the election process in Iran," Obama responded sternly.

"I would suggest that Mr. Ahmadinejad think carefully about the obligations he owes to his own people," he added. "And he might want to consider looking at the families of those who've been beaten or shot or detained. And, you know, that's where I think Mr. Ahmadinejad and others need to answer their questions."

It was Obama's first direct criticism of any of Iran's leaders. Even more, it was coupled with his first specific boost for Mousavi. "Mousavi has shown to have captured the imagination or the spirit of forces within Iran that were interested in opening up," Obama said.

The remark sought to clarify what many view as Obama's biggest misstep -- saying last week in a television interview that there may not be much difference between Ahmadinejad and Mousavi. But it appeared to swing over to an outright endorsement of Mousavi, though White House press secretary Robert Gibbs denied it was meant that way.

Obama also said for the first time that his offer to loosen the decades-old U.S. diplomatic freeze with Iran through direct talks is now in question.

"There is no doubt that any direct dialogue or diplomacy with Iran is going to be affected by the events of the last several weeks," Obama said, without elaborating.

Gibbs said Obama was "more stating the obvious" that no talks are possible while developments are still unfolding. And Obama said that an existing system of multilateral talks with Iran over its suspected goal of building a nuclear bomb, involving nations including the U.S., Europe, China and Russia, must continue.

"The clock is ticking. Iran is developing a nuclear capacity at a fairly rapid clip," he said.

Merkel agreed there must be no letup among nations trying to stop Iran's nuclear development, which Tehran insists is aimed at providing only electric power, not weapons. She said "we have to bring Russia and China alongside," referring to the two nations most historically unwilling to get tough with Iran over the nuclear standoff.