The legislation failed by a vote of 54-46 on Wednesday. A minimum of 60 was required for its passage. A handful of Senators from his own Democratic Party voted against it, while the White House-backed bill could get the support of only four Republican Senator.
If passed by the Congress and signed into law by the US President, the legislation would have expanded checks to cover all firearm sales at gun shows and over the Internet, with exemptions for sales between friends and acquaintances outside of commercial venues.
The legislation would have banned the possession, importation, manufacture, or transfer of any magazine that has the capacity to accept more than 10 rounds of ammunition. Half of the mass shootings since 1982 have involved high-capacity magazines.
In addition to the Newtown and Tucson tragedies, high-capacity magazines were used in mass shootings at Fort Hood, Virginia Tech, Aurora, and Oak Creek.
"All in all, this was a pretty shameful day for Washington," a visibly angry and upset Obama said in his remarks in the Rose Garden of the White House.
The defeat of the bill on the Senate floor is said to be a major upset for Obama presidency, a victory for the strong gun-control lobby supported by the National Rifle association. "But this effort is not over," Obama said.
"I want to make it clear to the American people we can still bring about meaningful changes that reduce gun violence, so long as the American people don't give up on it. Even without Congress, my administration will keep doing everything it can to protect more of our communities. We're going to address the barriers that prevent states from participating in the existing background check system," he said.
"We're going to give law enforcement more information about lost and stolen guns so it can do its job. We're going to help to put in place emergency plans to protect our children in their schools," the US President said.
"If this Congress refuses to listen to the American people and pass common-sense gun legislation, then the real impact is going to have to come from the voters," Obama said.
The NRA welcomed the defeat of the bill on the Senate floor.
"This amendment would have criminalised certain private transfers of firearms between honest citizens, requiring lifelong friends, neighbours and some family members to get federal government permission to exercise a fundamental right or face prosecution. As we have noted previously, expanding background checks, at gun shows or elsewhere, will not reduce violent crime or keep our kids safe in their schools," said Chris W Cox of the NRA.
US Senator Frank R Lautenberg said it is "outrageous" that the Senate can't rise to the occasion and summon the courage to ban high-capacity magazines and protect the loved ones from mass murderers.
"Opponents of my amendment chose to side with the NRA and the gun industry over the victims of Newtown, Aurora, Tucson, and other mass shootings. The large number of casualties in recent mass shootings were made possible by these super-sized magazines --banning them is common sense and would save lives," he said.
Raninder gets second term in charge as NRAI chief
Markets end choppy session on a flat note
Man who sent poisonous letter to Obama held
Now poisoned letter sent to US senator
Letter to Obama tested positive for deadly poison ricin