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Obama and Netanyahu, meanwhile, appear to have reached an impasse after two and a half years of rocky relations. The Obama White House was angered when Netanyahu refused a U.S. demand to halt building Jewish settlements in the West Bank.

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 Democratic president has quickly come under fire from Republican critics, who accuse him of betraying Israel, the closest U.S. ally in the region. Pushing Netanyahu could alienate U.S. supporters of Israel as Obama seeks re-election.

Israeli research and development of weapons systems is often co-financed by the US. Joint military projects have been set up, such as the development of the Arrow Missile System, which has been operational since 2000.

In August 2007, a new Memorandum of Understanding (MOU) on military aid was signed between Israel and the US. This MOU guarantees Israel $30 billion in military aid via FMF over the next decade.

lus all of the Gaza Strip, when the Palestinian Authority regains control over the Gaza Strip, which the militant group Hamas seized from forces loyal to Abbas in June 2006.

The Israeli proposal is not acceptable," Abbas's spokesman said. "The Palestinian side will only accept a Palestinian state with territorial continu

Perhaps one would need to consider the scenario of a surprise attack against Israel, such as the 1973 war, but fought within the 1967 borders.