That decision infuriated Washington, and prompted the White House to indicate it was "evaluating the utility" of the September meeting. Sen. John McCain, R-Ariz., last week called on the U.S. "to fundamentally rethink our relationship with Putin's Russia."
There have also been tensions between Moscow and Washington over missile defenses and how to deal with the civil war in Syria.
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The decision to cancel the meeting also came hours after Obama criticized Russia's policies toward gays and lesbians in an interview with "The Tonight Show" host Jay Leno.
Obama told Leno he would take a tough stance with Russia at the summit.
"There are times when they slip back into Cold War thinking and Cold War mentality," he said of the Russian government. "What I continually say to them and to President Putin, that's the past."
—By NBC News' Alastair Jamieson. Chuck Todd contributed to this report.