In his first meeting with a foreign leader since last week's extremist attacks in Paris, Obama on Friday reaffirmed Washington's close ties with its "indispensable ally" Britain and vowed both would support France.
"I know David joins me when I say that we will continue to do everything in our power to help France seek the justice that is needed... to defeat these terrorist networks," Obama said at a joint news conference.
He said the Paris attacks "underscored how terrorist groups like al-Qaeda and ISIL are actively trying to inspire and support people within our own countries to engage in terrorism."
But Obama warned Paris must not simply respond to the attacks with a security crackdown but should also learn to better integrate its Muslim minority.
"Our biggest advantage, major, is that our Muslim populations, they feel themselves to be Americans and there is this incredible process of immigration and assimilation that is part of our tradition," he said.
"There are parts of Europe in which that's not the case ... it's important for Europe not to simply respond with a hammer and law enforcement and military approaches to these problems."
He said the US would hold a summit in February on countering violent extremism and the threat of radicalized Islamist fighters returning to their home countries from the war in Syria.
Cameron said: "This morning, we have agreed to establish a joint group to identify what more we can do to counter the rise of domestic violent extremism and to learn from one another."
The British leader described the jihadist movements that inspired the Paris attackers a "poisonous, fanatical death cult."
Cameron said the two leaders had agreed to deepen their cooperation on cyber-security.
In a separate statement, the White House said the US National Security Agency and FBI would form a joint cyber-security cell with British domestic intelligence MI5 and eavesdropping agency GCHQ.
This will speed intelligence sharing and strengthen the allies' defences against cyber-attacks from foreign governments and criminals, the leaders said.
The partners will begin their reinforced cooperation with a year-long exercise to test and strengthen the defences of the financial sector.
In recent weeks Washington has been embarrassed by the seizure of a military Twitter account by jihadist sympathisers and angered by North Korea's alleged hacking of Hollywood studio Sony.
But trans-Atlantic partnership has also had successes.
A young hacker -- suspected of taking part in attacks that shut down online gaming platforms over Christmas - was arrested on Friday in a joint operation with the FBI and British police.
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