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Prime Minister Benjamin Netanyahu believes that U.S. President Barack Obama wants a confrontation with Israel, based on Obama's speech in Cairo last week, Netanyahu's confidants say.

In Netanyahu's opinion, the Americans believe an open controversy with Israel would serve the Obama administration's main objective of improving U.S. relations with the Arab world, the aides say.

In his speech, Obama called for a "new beginning" in relations between America and Islam, and spoke at length about the Israeli-Arab conflict.

He demanded that Israel recognize the Palestinians' right to a state and freeze construction in the West Bank settlements.

Netanyahu objects to a complete suspension of construction beyond the Green Line. This is Netanyahu's main bone of contention with the Obama administration.

Netanyahu expects Obama to present his plan for peace in the Middle East next month. He fears that the president will present positions that will not be easy for Israel to accept, such as a demand to withdraw to the lines of June 4, 1967. These lines, before the Six-Day War, are at the basis of both the Arab peace initiative and previous American presidents' peace forays.

By telephone yesterday, Netanyahu told Obama of his intention to give a key policy speech on Sunday, in which he would outline his policy to achieve peace and security. Obama promised to listen to the address closely, and the two "agreed to maintain open and continuous contact," the Prime Minister's Bureau said.

Today Netanyahu is to meet the special U.S. envoy to the Middle East, George Mitchell.

Political sources close to Netanyahu say that White House Chief of Staff Rahm Emanuel and Obama's senior political consultant David Axelrod are behind the clash between the administration and Israel.

Israel historically has depended on the White House to balance the consensus of officials in the state and defense departments; this consensus usually leans toward the Arab side.

Israeli officials say that under Obama, the White House has become the main problem in relations.

Israel is also having difficulty mustering the support of Congress and the American Jewish community for its demand to continue expanding the settlements.

Defense Minister Ehud Barak, who visited Washington last week, says the Obama administration has no personal problem with Netanyahu and that the Americans do not not seek to undermine the Israeli coalition and topple the government.

Barak says Obama's positions are guided by strategic considerations - he has undertaken to withdraw from Iraq and is striving to end the war in Afghanistan and needs the moderate Arab states' support. This, rather than "political persecution," is behind the administration's attitude toward Israel, he says.