He used exactly those words, "Ground Zero is, indeed, hallowed ground."He did not say that.... Just no way did he say that... use his words, not your interpertation of what he ment. What he said was...
"Time and again, the American people have demonstrated that we can work through these issues, and stay true to our core values and emerge stronger for it. So it must be and will be today."
He said those words just before he said, “But let me be clear: as a citizen, and as president, I believe that Muslims have the same right to practice their religion as anyone else in this country. That includes the right to build a place of worship and a community center on private property in lower Manhattan, in accordance with local laws and ordinances."
http://www.realclearpolitics.com/2010/08/14/obama_stands_up_for_ground_zero_mosque_239656.html