BARACK OBAMA’S aggressive approach to Middle East diplomacy faces a key test in Israel this week amid mounting resentment in Jerusalem over US policies towards Iran and the Arab world.

After months of conciliatory gestures towards Israel’s neighbours – culminating in his visit to Cairo last month – Obama is dispatching advisers to Jerusalem to press for a breakthrough in the long-stalled Middle East peace process.

Robert Gates, the US defence secretary, and General Jim Jones, Obama’s national security adviser, will address concerns about Iran’s nuclear programme while the former senator George Mitchell, the US president’s Middle East envoy, is already pressing for a freeze on construction of Jewish settlements in the Palestinian-dominated West Bank.

Both issues have provoked angry Israeli complaints that America is reneging on agreements. Last week officials on both sides engaged in an exchange of public irritation as Israel’s concerns about a nuclear Iran clashed with Washington’s need for demonstrable progress on a peace plan.

After months of speculation that Israel is ready to attack Iranian nuclear facilities, a Pentagon official said any such move would have “profoundly destabilising consequences”.

The official told The Jerusalem Post: “It wouldn’t just affect the general level of stability in the region . . . it would affect our interests and the safety of our forces in Afghanistan and Iraq and elsewhere.”

A source close to Binyamin Netanyahu, the Israeli prime minister, retorted: “Our relations with Washington are sacred, but at the end of the day it is Netanyahu’s responsibility for the lives of 5m Jews in Israel, not Obama’s.”

A hint of a compromise on the nuclear issue emerged last week when Hillary Clinton, the US secretary of state, talked of a possible US “defence umbrella” that would shield Israel from an Iranian strike in return for guarantees that Israel would not launch its own attack, a move that would demolish Obama’s strategy of reaching out to the Arab world and Iran.

Yesterday, the leader of Iran’s Revolutionary Guards said Tehran would strike Israel’s nuclear facilities if attacked.

Gates is expected to expand this week on US proposals for military cooperation, but Israeli officials were quick to denounce Clinton’s statement as defeatist. “It sounds as if they’ve already accepted [a nuclear Iran],” said Dan Meridor, the intelligence minister.

The military issues may prove a cakewalk compared to the potentially explosive argument over Jewish settlements. Saeb Erekat, the chief Palestinian negotiator, has warned that if settlement building continues, “Arabs and Palestinians will believe the administration is incapable of swaying Israel”.

Last week the United States warned Israel not to proceed with a residential project in a Palestinian area of East Jerusalem, provoking another sharp response from Netanyahu. “Jews have the right to build all over Jerusalem,” he replied.

A US State Department spokesman dismissed as “premature” reports that Washington had threatened economic penalties if Israel failed to freeze settlements. Yet observers noted that Obama’s credibility with the Arab world depended on his ability to secure early Israeli concessions.

Mitchell was reported to be working on a deal to freeze settlements for three to six months. “Israel never expected to have such pressure put on it publicly,” said Stephen Cohen of the Institute for Middle East Peace and Development.

The problem for Obama is that any sign of Israeli weakness could prove costly for Netanyahu, whose aides described the US hard line as “childish”, “stupid” and “delusional”.

Obama recently described negotiations with Israel as “a kabuki dance going on constantly”. Like many US presidents before him, he may be about to discover that working on Middle East peace plans often means one step forward, followed by two steps back.

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