"I think that, given the graphic nature of these photos, it would create some national security risk," Mr Obama said.
The al-Qaeda leader was killed by US special forces in northern Pakistan on Monday. His body was buried at sea.
On Thursday, Mr Obama is to visit the site of the 11 September 2001 attacks on New York, one of many Bin Laden claimed to have masterminded.
Mr Obama said: "It is important for us to make sure that very graphic photos of somebody who was shot in the head are not floating around as an incitement to additional violence, as a propaganda tool. That's not who we are."
The US administration has been monitoring world reaction - amid conspiracy theories about the al-Qaeda leader following conflicting accounts given by US officials.
"There are going to be some folks who deny it. The fact of the matter is, you won't see Bin Laden walking on this Earth again," Mr Obama said.
On Thursday, Pakistan Foreign Secretary Salman Bashir again dismissed allegations his country's secret services had links to al-Qaeda, and said the investigation into the presence of Bin Laden in Abbottabad would reveal what failures there were.
Legality question Mr Obama's decision - revealed during an interview with CBS television's 60 Minutes programme - prompted a mixed reaction from US politicians, some of whom were shown the photos.
Continue reading the main story 
The compound has had lots of people around it over the past 24 hours; the police have been moving people away sporadically, closing the area and opening it again. But while it is open, a lot of locals have come round.
Of course, they have been stunned by what has happened. They are very curious about this place, and a lot of those people are talking about these pictures. A lot of people have been saying right from the start that they still can't quite believe that Osama Bin Laden was living in their midst and that he was killed here.
They want some kind of proof, even though the Pakistani authorities have been very categorical about the fact they say he has been killed.
At the scene
Of course, they have been stunned by what has happened. They are very curious about this place, and a lot of those people are talking about these pictures. A lot of people have been saying right from the start that they still can't quite believe that Osama Bin Laden was living in their midst and that he was killed here.
They want some kind of proof, even though the Pakistani authorities have been very categorical about the fact they say he has been killed.
Steny Hoyer, the number two Democrat in the House of Representatives, said he shared the president's view.
"In my opinion there's no end served by releasing a picture of someone who has been killed," he said, quoted by CNN.But senior Republican Senator Lindsey Graham said the decision was a mistake.
"I know Bin Laden is dead," he said. "But the best way to protect and defend our interests overseas is to prove that fact to the rest of the world. I'm afraid the decision made today by President Obama will unnecessarily prolong this debate."
The decision came as US officials began to comb through computer hard drives, mobile phones and USB sticks found during the US Navy Seals raid on the compound in Abbottabad where Bin Laden was living.
US Attorney General Eric Holder said Washington expected to add more names to its terrorism watch-list as a result of data seized in the raid.
Two telephone numbers and 500 euros ($745; £450) were also found stitched into Bin Laden's clothing, there in case he needed to make a quick getaway.
Critics have raised concerns about the legality of the operation, after the US revised its account to acknowledge Bin Laden was unarmed when shot dead.
But Mr Holder said Bin Laden was a lawful military target, whose killing was "an act of national self-defence".
"It was a kill-or-capture mission. He made no attempt to surrender."
Survivors Three other men and one woman died in Monday's assault, while one of the al-Qaeda leader's wives was injured.
Mardell's America
“Start Quote
End QuoteThere is the suspicion that the US never wanted to take Bin Laden alive”
- Read Mark's thoughts in full
The Pakistani military is holding the survivors of the US special forces operation. They are being kept at secret locations in the cities of Rawalpindi and Islamabad.
The 54-year-old Bin Laden - America's most-wanted man - was buried at sea from a US aircraft carrier, say US officials.Mr Obama, who monitored the progress of the raid from the White House, saw his approval rating jump 11 points to 57% in a New York Times/CBS News poll on Wednesday.
The compound where the operation took place is just a few hundred metres from the Pakistan Military Academy.
In unusually frank remarks, CIA director Leon Panetta told Time magazine: "It was decided that any effort to work with the Pakistanis could jeopardise the mission. They might alert the targets."
Some US lawmakers are calling for billions of dollars in aid for Pakistan to be reduced or stopped altogether.
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