“Based on information and intelligence we have obtained, we believe that a US counter-terrorism operation targeting an Al-Qaeda compound in the Afghanistan-Pakistan border region, accidentally killed Warren and Giovanni this past January," Obama said at the White House.
The two hostages were American national Warren Weinstein and Italian Giovanni Lo Porto.
"Warren and Giovanni were aid workers in Pakistan, devoted to improving the lives of the Pakistani people," Obama said.
"After Warren was abducted by Al-Qaeda in 2011, I directed my national security team to do everything possible to find him and to bring him home safely to his family. I spoke with Warren's wife Elaine and Prime Minister Matteo Renzi of Italy.
"As a husband and as a father, I cannot begin to imagine the anguish that the Weinstein and Lo Porto families are enduring today," he said.
"I realise that there are no words that can ever equal their loss. I know that there is nothing that I can ever say or do to ease their heartache," said the US president, taking full responsibility for all American counter-terrorism operations, including the one that inadvertently took the lives of the two hostages.
Obama said the initial assessment indicates that the operation was fully consistent with the guidelines under which the US conducts counter-terrorism efforts in the region, which has been in focus for years as it is the base of the Al-Qaeda leadership, and was based on intelligence obtained at the time, including hundreds of hours of surveillance.
"We believed that this was an Al-Qaeda compound, that no civilians were present and that capturing these terrorists was not possible. And we do believe that the operation did take out dangerous members of Al-Qaeda," he said.
"What we did not know, tragically, is that Al-Qaeda was hiding the presence of Warren and Giovanni in this same compound," he added.
In an earlier statement, White House Press Secretary Josh Earnest said, Ahmed Farouq, an American who was an Al-Qaeda leader, was killed in the same operation that resulted in the deaths of Weinstein and Lo Porto.
He also said that Adam Gadahn, another American who became a prominent member of Al-Qaeda, was killed in January, likely in a separate US operation.
"While both Farouq and Gadahn were Al-Qaeda members, neither was specifically targeted, and we did not have information indicating their presence at the sites of these operations," Earnest said.
Italy described the death of hostage Giovanni Lo Porto a "tragic and fatal error by our US allies" but said "terrorists" were entirely to blame.
The foreign ministry said in a statement that Lo Porto had died "because of the tragic and fatal error by our American allies, recognised by President (Barack) Obama".
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