Israeli Prime Minister Benjamin Netanyahu on Friday bluntly rejected President Barack Obama's vision for the borders of a future Palestinian state, opening up one of the deepest divides in years between Washington and the Jewish state.
In an unusually sharp rebuke to Israel's closest ally, Netanyahu told Obama his endorsement of a long-standing Palestinian demand to go back to Israel's 1967 boundaries -- meaning big concessions of occupied land -- would leave Israel "indefensible."
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"Peace based on illusions will crash eventually on the rocks of Middle East reality," an unsmiling Netanyahu said as Obama listened intently beside him in the Oval Office.
He insisted that Israel was willing to make compromises for peace, but made clear he had major differences with Washington over how to advance the long-stalled peace process.
Netanyahu's firm resistance now raises the question of how hard Obama will push for concessions he is unlikely to get, and whether the peace vision he laid out on Thursday will ever get off the ground.
Despite assurances of friendship by both leaders, this week's events also appeared to herald tense months ahead for U.S.-Israeli relations, even as the Arab world goes through political tumult and Palestinians prepare a unilateral bid this fall for statehood at the United Nations.
Speaking to reporters after the meeting, Obama said he reiterated to Netanyahu the peace "principles" he offered on Thursday in a policy speech on Middle East political upheaval.
The goal, he said, "has to be a secure Israeli state, a Jewish state, but continuous security with a completely functioning and effective Palestinian state."
Obama on Thursday embraced a long-sought goal by the Palestinians: that the state they seek in the occupied West Bank and Gaza Strip should largely be drawn along lines that existed before the 1967 war in which Israel captured those territories and East Jerusalem.
But Netanyahu, who heads a right-leaning, pro-settler coalition, said, "We can't go back to those indefensible lines."
CRISIS IN RELATIONS
The brewing crisis in U.S.-Israeli relations dimmed even further the prospect for resuming peace talks that collapsed late last year when Palestinians walked away in a dispute over Israeli settlement building in the West Bank.
The Israeli leader has had strained relations with Obama in the past, and their latest meeting seemed unlikely to improve their personal chemistry.
"There is a feeling that Washington does not understand the reality, doesn't understand what we face," an official on board the plane taking Netanyahu to Washington told reporters.
Israel also has underlined its position by announcing the approval of plans to build 1,550 housing units in two Jewish settlements on annexed West Bank land around Jerusalem.
Obama's first outright declaration of his stance on the contested issue of borders could help ease doubts in the Arab world about his commitment to acting as an even-handed broker.
But in line with Netanyahu's stance, Obama voiced opposition to a Palestinian plan to seek U.N. recognition of statehood in September in the absence of renewed peace talks.
The Democratic president quickly came under fire from Republican critics, who accused him of betraying Israel, the closest U.S. ally in the region.
Pushing Netanyahu risks also alienating the Jewish state's base of support among the U.S. public and in Congress as Obama seeks re-election in 2012.
Obama, in his speech on Thursday, laid down his clearest markers yet on the compromises he believes Israel and the Palestinians must make to resolve a conflict that has long been seen as source of Middle East tension.
But he did not present a formal U.S. peace plan or any timetable for a deal he had once promised to clinch by September.
Talks brokered by Washington at Obama's initiative collapsed last year when Netanyahu refused to extend a moratorium on settlement building in the West Bank.
In Thursday's speech, Obama said: "We believe the borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps" of land.
While this has long been the private view in Washington, Obama went further than U.S. officials have gone in the recent past, when they described such a solution as a Palestinian aspiration but did not embrace it as their own.
Agreed swaps would allow Israel to keep settlements in the West Bank in return for giving the Palestinians other land.