The Israeli government is seeking ways to accommodate American demands to stop building in the settlements as some commentators warn of the worst period in US-Israel relations for over a decade.

As President Barack Obama headed for the Middle East and his address to the Muslim world in Cairo on Thursday, Israeli officials were concerned by a report that Mr Obama was considering abandoning the long-standing United States veto of United Nations resolutions against Israel.

This was coupled with a radio interview in which he said of Israel: “Part of being a good friend is being honest and I think there have been times where we are not as honest as we should be about the fact that the current direction, the current trajectory, in the region is profoundly negative, not only for Israeli interests but also US interests.”

The main sticking point between the two governments is the American demand that Israel cease all settlement building in the West Bank. Israel will commit to building no new settlements and removing the outposts ruled illegal by the Justice Ministry, but the government insists that existing settlements must build to accommodate “natural growth”. The US has so far refused to accept Israel’s position and talks over the issue last week in London failed to reach an agreement.

“They are pushing us real hard,” admitted a senior adviser in the Prime Minister’s Office. “We will see how much rough love we can still take.”

The government has cracked down on larger outposts by issuing eviction orders and security forces have evacuated a number of smaller ones. Settlers retaliated by setting fire to Palestinian fields and olive groves.

“We are not a violent community,” said Ittai Zar, founder of the Havat Gilad outpost. “But when you are backed into a corner, you start lashing out. Our government should stop listening to what they say abroad and care about us Jews.”

They also condemned the removal of IDF roadblocks from around West Bank Palestinian towns.

While observers warn of growing disagreement, a senior source in Israel’s defence establishment said that ties between the Pentagon and Israel’s army and Ministry of Defence have “never been closer”. The Pentagon announced two weeks ago that it would continue financing Israel’s advanced anti-ballistic missile defence system, Arrow 3. The professionals on both sides “see eye to eye on the Iranian threat”.

Prime Minister Binyamin Netanyahu was pleasantly surprised by Mr Obama’s resolute opposition to Iran developing a nuclear weapon when they met last month in Washington. “The administration is making it very clear that they want us to pay for their co-operation over Iran in Palestinian currency,” said a source close to the talks.

Mr Obama tried to show his friendship towards Israel on Tuesday, just before he left for the Middle East, when he dropped in on a meeting between Defence Minister Ehud Barak and National Security Adviser James Jones in the White House. But it is hard for many Israelis not take Israel’s omission from Mr Obama’s visit as a snub.

“It is too early to say whether the relationship between the two countries is in a freefall,” said one Israeli diplomat. “Once Obama is back from Cairo, he will have to start dealing with reality. Things will not change just because of a few speeches.”