President Obama, Israeli Prime Minister Netanyahu Dismiss Reports of Tensions

President Obama and Israeli Prime Minister Benjamin Netanyahu today dismissed reports of strained relations between their nations, presenting a unified image and commitment to restarting direct talks between the Israelis and Palestinians.

Despite the handshakes, smiles and pledges of cooperation, the underlying theme of the meeting today at the White House appeared to be aimed at "resetting" U.S.-Israeli relations, repairing the damage and lifting the mood music after recent tension.

Obama said the two leaders had an extensive conversation about the Middle East peace process and expressed his optimism that the Israeli leader is committed to resuming talks with the Palestinians.

Obama said that Netanyahu wants peace in the Middle East, will take risks for peace and is willing to engage in serious conversations with the Palestinians to achieve the goal of two states living together in peace.

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"We expect proximity talks to lead to direct talks," the president said after a meeting with Netanyahu in the Oval Office.

The Israeli leader said it was "high time" to begin direct talks with the Palestinians.

Both leaders dismissed the notion that recent tensions have damaged the partnership between the two allies. Obama called the bond between the United States and Israel "unbreakable" and Netanyahu said he would paraphrase the American author Mark Twain by noting that the "reports of the demise of the special relationship" between the two countries "are just flat wrong."

Unlike March's frosty reception in Washington, this time the Israeli prime minister got both a press conference and a meal.

In March, Netanyahu didn't even get a photo op with his closest ally, such was the U.S. anger over continued Jewish settlement building in East Jerusalem. Tuesday featured plenty of handshakes and smiles. But there were plenty of difficult issues to discuss.

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Obama to Meet with Israeli PM

Regarding the peace process, the U.S. claims George Mitchell's proximity talks have narrowed the gaps between the two sides. But that optimism is not widely shared. Certainly not by Palestinian Authority President Mahmoud Abbas, who insists Netanyahu has been foot-dragging on the core issues.

The big challenge now is how to move the talks to the direct phase. The Palestinians are reluctant to do that without guarantees those talks will start where they left off with Ehud Olmert, the previous Israeli leader, and not begin again from scratch.

The current Israeli settlement freeze will also come up for discussion in Washington. It is due to expire at the end of September, and Netanyahu is under considerable right wing pressure not to extend it. Abbas may walk away from negotiations if construction restarts.

One idea would be to lure the Palestinians into direct talks on the promise of an extension. This may give Netanyahu room to maneuver with the awkward squad in his cabinet. Some suggest Obama may even allude to Israel's retention of the settlement blocs in any final deal, as President George W. Bush did for Ariel Sharon in 2004, to further bolster Netanyahu's position.

Abbas could present any continued settlement restrictions as an achievement to his own skeptical public.

Other topics up for discussion included Iran's nuclear program and the recently imposed sanctions.

The continuing deterioration in relations between Israel and Turkey is becoming a pressing problem. Following May's fatal Israeli raid against a flotilla of Turkish ships bound for Gaza in which Israeli commandos killed nine activists, Turkey is threatening to shut down diplomatic relations with the Jewish state. The slide in relations between the U.S.'s two closest regional partners is a serious matter.

'Thorny Issues'

Netanyahu will also face questions over Israel's blockade of Gaza. Israel has significantly relaxed the transfer of civilian goods into the territory run by Hamas. Obama has described the blockade as unsustainable.

There is also bad feeling over the recently signed Nuclear Nonproliferation Treaty. Backed by Washington, the new draft appears to single out Israel's long-held policy of nuclear ambiguity for special scrutiny. Israeli officials are unhappy the U.S. signed the treaty, and had hoped the U.S. would work to remove the offending paragraph.

One problem that won't go away for Netanyahu is the captive Israeli soldier Gilad Shalit, who has been held for four years as a prisoner of Hamas in the Gaza Strip. His parents are halfway through a march to Netanyahu's office in Jerusalem, gathering thousands of supporters as they go. Netanyahu refuses to release all the prisoners Hamas wants in return for freeing the soldier. The prime minister said he is prepared to pay a high price but "not any price."

So there are plenty of thorny issues to discuss between two men, who are said to lack personal chemistry or similar world views. But they know the continuing crisis in relations is damaging to both of them. Great efforts will be made to hide disagreements, and Tuesday's meeting will be likely billed as a fresh start.