Making good on a promise to punish Vladimir Putin's government for allegedly trying to tilt the 2016 election in Donald Trump's favor, Obama unveiled a broad range of steps that will inflame tensions with both Moscow and the president-elect.
US intelligence had concluded that a hack-and-release of Democratic Party and Hillary Clinton staff emails was ordered by the Kremlin and was designed to put the Republican real estate mogul in the Oval Office.
"I have ordered a number of actions in response to the Russian government's aggressive harassment of US officials and cyber operations aimed at the US election," Obama said in a statement.
In response to the hacks -- dubbed "Grizzly Steppe" by US officials -- Obama announced sanctions against Russia's military intelligence agency, known as GRU, and the FSB -- the rump what was once the KGB.
Trump said while he believes the US should "move on to bigger and better things," he would meet with intelligence leaders next week for a briefing on the situation.
'Efforts to harm US interests'
The 35 Russian intelligence operatives -- based at the Russian embassy in Washington and the consulate in San Francisco -- have been declared "persona non grata" and ordered to leave the country within 72 hours.
US officials also moved to close two Russian compounds in New York and Maryland.
The latter facility, a summer house a short drive from the US capital, was once featured in a Washington lifestyle magazine and was described as a stately house surrounded by lush gardens on the banks of the Chester River, with an "impressive collection of German and Hungarian porcelains."
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The US government said it is now used "for intelligence-related purposes."
Obama warned of further covert actions.
"These actions are not the sum total of our response to Russia's aggressive activities. We will continue to take a variety of actions at a time and place of our choosing, some of which will not be publicized," he said.
"These actions follow repeated private and public warnings that we have issued to the Russian government, and are a necessary and appropriate response to efforts to harm US interests in violation of established international norms of behavior."
Those warnings, officials said, included a personal message from Obama to Putin when the two leaders met briefly in Hangzhou, China last September.
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Russian reprisals?
Moscow quickly rejected US accusations of cyber-interference as "unfounded" and vowed to retaliate.
Kremlin spokesman Dmitry Peskov accused the Obama administration of trying to "definitively destroy US-Russia relations which have already reached a low."
He said Moscow would "react in an adequate manner based on the principles of reciprocity."
Trump has questioned whether Russia really tipped the electoral scale, painting Obama's accusations as a thinly veiled effort by a Democratic president to delegitimize a Republican victory.
After the sanctions were imposed, Trump called on the country to "move on to bigger and better things" but offered a conciliatory pledge to meet next week with US spy chiefs he has harshly criticized.
Obama said pointedly stated on Thursday that "all Americans should be alarmed by Russia's actions."
Could Trump change course?
The timing of his actions leave Trump and Moscow in a difficult position.
Any attempt by the mogul-turned-politico to reverse Obama's sanctions once he takes office on January 20 would be widely seen as condoning Russian interference.
That proposition was made even more difficult by Obama's decision to also link the sanctions to harassment of US diplomats in Moscow, which Washington described as "unprecedented" in the post-Cold War era.
"These are executive actions," said a senior Obama administration official.
"So if a future president decided that he wanted to allow in a large tranche of Russian intelligence agents, presumably a future president could invite that action. We think it would be inadvisable."
Trump's fellow Republicans are also limiting his room for maneuver, increasingly distancing themselves from his pro-Russian stance.
House Speaker Paul Ryan issued a statement welcoming the sanctions as "overdue."
"Russia does not share America's interests. In fact, it has consistently sought to undermine them," he said.
Senior lawmakers on both sides of the political aisle have called for a congressional probe into Russia's actions. Obama said Congress would receive a report in the coming days about Russia's cyber-meddling.
Frosty ties
Obama's actions will also force Putin to weigh harsh retaliatory steps and the chance it could endanger an expected cooling of tensions under Trump.
Relations between Washington and Moscow are at their worst since the end of the Cold War, and Obama had previously imposed sanctions over Russia's interventions in Syria and Ukraine.
US officials played down the impact that sanctions against the GRU and the FSB could have on intelligence-sharing on issues like counterterrorism, saying the cooperation was already limited.
Both agencies will face sanctions, along with four individual GRU officers including agency chief Igor Valentinovich Korobov and three other entities.
In addition, the US Treasury slapped sanctions on two individuals, Evgeniy Mikhailovich Bogachev and Aleksey Alekseyevich Belan, for "involvement in malicious cyber-enabled activities."
The sanctions freeze any assets they may have in the United States and blocks US companies from doing business with them.
The US government is also declassifying technical information on Russian cyber activity to help companies defend against future attacks.
"The United States and friends and allies around the world must work together to oppose Russia's efforts to undermine established international norms of behavior and interfere with democratic governance," Obama said.
That reflects growing concerns that Russia could target upcoming elections in France, Germany and the Netherlands.
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