Well knock me over with a feather alert:

White House Ducks 9/11 Ground Zero Mosque Project Bouncer
2010-08-05 13:40:00
The Obama administration has distanced itself from the heated dispute over whether an Islamic cultural center and mosque should be built a couple blocks away from the 9/11 Ground Zero.
“This is rightly a matter for New York City and the local community to decide,” CBS News quoted Robert Gibbs, White House Press Secretary, as saying.
It comes despite President Barack Obama’s high profile efforts to reach out to the Muslim community since taking office.
“Islam, as we know, is part of America,” Obama had said last September.
On a number of occasions, Obama has also sought to defend American Muslims from the stigma of the terrorists who share their religion.
“We know that the vast majority of Muslims reject Al-Qaeda,” he said last January.
Based on these statements, it was expected that Obama would take the side of the Muslims seeking to build the 13-story community center and mosque in New York.
However, it is now being said that the President does not want to offend the Muslims nor the families of 9/11 victims, who view the construction of the mosque as an insult to the memories of their loved ones.
sify.com

I guess the WH thinks this is a local issue rather than a national one, eh?