SETTLEMENT EXPANSION

Israeli settlement expansion lies at the heart of much of the rancor between Netanyahu and Obama, who has said the United States does not accept the legitimacy of continued settlement.

Most major powers regard settlements as illegal under international law and an impediment to peace. The Israelis claim historical and biblical ties to the West Bank and East Jerusalem, home to some 500,000 settlers, and dispute their building in these areas is illegal.

All Israeli leaders since 1967 have backed the settlement movement, but Netanyahu has been especially supportive. Yuval Steinitz, who was replaced as finance minister last Friday, said in November that the government had quietly doubled the portion of the national budget dedicated to West Bank settlements.

In December and January, Israel announced plans to build more than 11,000 new houses on land Palestinians want for a future state. Pro-settler politicians have landed several top jobs in the new Netanyahu government, including the housing minister, who has pledged to keep on building.

Many Western diplomats based in Jerusalem privately question whether the so-called two-state solution, of an independent Israel living alongside an independent Palestine, is still viable given the never-ending expansion of settlement blocs.

Israel's press says Obama has pointedly not invited students from a university in the West Bank settlement of Ariel to attend a speech he is meant to give in Jerusalem this week.

RELATIONS RESET

Relations between Obama, 51, and Netanyahu, 63, have been marked by slights, mutual suspicion and outright antipathy.

Supporters of Netanyahu accuse Obama of trying to browbeat Israel into making concessions to the Palestinians, particularly over the issue of settlements. Obama supporters say Netanyahu interfered in the 2012 presidential election, overtly backing Republican challenger Mitt Romney.

In one Oval Office meeting in 2011, Netanyahu gave Obama a public lecture on Jewish history. A year later, when the Israeli leader visited the United States, Obama said he was too busy to meet him. They will try to reset their relationship this week.

Despite the fact that Obama oversaw ever-closer military ties between the two nations, he has never won the affection of ordinary Israelis, who resented the fact that he did not visit their country in his first term, but did go to Egypt and Turkey.

A poll in the Maariv daily on March 15 said 68 percent of Israelis had an unfavorable or hostile attitude towards Obama, while just 10 percent said they liked him.

Annual US military aid to Israel is put at $3 billion.

UPHEAVAL CAUSES FRICTION

Regional upheaval across the Middle East has proved another source of friction between Israel and the United States over the past two years.

Israeli officials were especially incensed by what they saw as Washington's approval for the ousting of Egypt's former president, Hosni Mubarak, in February 2011. The late President Anwar Sadat signed the Israeli-Egyptian peace treaty, a pillar of Israel's regional security strategy, in 1979.

Seen from Netanyahu's office, US policy-making in the region has been naive and failed to anticipate the rise in power of Islamist forces in one Arab nation after another.

US officials argue that Washington could not have stood in the way of the march of history and believe that dialogue with the new governments that have emerged in the wake of the Arab uprisings is the only way to forge meaningful ties.

Israel would now like to see the United States play a more active role in supporting non-Islamist rebels battling President Bashar al-Assad in Syria, fearful that growing power vacuums in its northern neighbor will be filled by Jihadist militants.