US may put North Korea on terrorism list

Obama described the hacking case as a "very costly, very expensive" example of cyber vandalism, but did not call it an act of war. In trying to fashion a proportionate response, the president said the US would examine the facts to determine whether North Korea should find itself back on the terrorism sponsors list.

"We're going to review those through a process that's already in place," Obama told CNN's "State of the Union" in an interview to air today. "I'll wait to review what the findings are."

North Korea spent two decades on the list until the Bush Administration removed it in 2008 during nuclear negotiations. Some lawmakers have called for the designation to be restored following the hack that led Sony to cancel the release of a big-budget film that North Korea found offensive.

Only Iran, Sudan, Syria and Cuba remain on the list, which triggers sanctions that limit US aid, defense exports and certain financial transactions.

But adding North Korea back could be difficult. To meet the criteria, the State Department must determine that a country has repeatedly supported acts of international terrorism, a definition that traditionally has referred to violent, physical attacks rather than hacking.

Obama also leveled fresh criticism against Sony over its decision to shelve "The Interview," despite the company's insistence that its hand was forced after movie theaters refused to show it.

While professing sympathy for Sony's situation, Obama suggested he might have been able to help address the problem if given the chance.

"You know, had they talked to me directly about this decision, I might have called the movie theater chains and distributors and asked them what that story was," Obama said.

Sony's CEO has disputed that the company never reached out, saying he spoke to a senior White House adviser about the situation before Sony announced the decision. White House officials said Sony did discuss cyber security with the federal government, but that the White House was never consulted on the decision not to distribute the film.

"Sometimes this is a matter of setting a tone and being very clear that we're not going to be intimidated by some, you know, cyber hackers," Obama said. "And I expect all of us to remember that and operate on that basis going forward."

North Korea has denied hacking the studio, and on Saturday proposed a joint investigation with the US to determine the true culprit. The White House rejected the idea and said it was confident North Korea was responsible.

But the next decision - how to respond - is hanging over the president as he vacations with his family in Hawaii.

Obama's options are limited. The US already has trade penalties in place and there is no appetite for military action.