Netanyahu’s calculation in accelerating the construction of hundreds of homes in contested east Jerusalem is to shore up his hardline base at a time when political rivals are agitating for even tougher positions toward the Palestinians, say six people who have worked with or advised him. They spoke on condition of anonymity to discuss his thinking freely.

With some political analysts predicting Obama’s Democrats will lose the Senate in midterm elections next week, Netanyahu can concentrate on propping himself up domestically because he doesn’t expect a painful backlash from taking on the U.S., they said.

“There’s a growing sense among America’s regional allies that you can get away with standing up to this administration and there won’t be a huge cost,” said Jonathan Spyer, a senior research fellow at the Global Research in International Affairs Center in Herzliya, Israel. Netanyahu “clearly thinks Obama’s view of the Middle East is utterly delusional, so he’s not going to alter his own policies. This could only be good for him domestically.”

The latest falling-out was sparked by Israel’s plan to build more than 1,000 homes for Jewish residents in areas of Jerusalem the Palestinians claim for their hoped-for state. U.S. denunciation was unusually harsh.

Character Attack

“Israel’s leaders have said they support a two-state solution, but moving forward with this kind of action would be incompatible with the pursuit of peace,” State Department spokeswoman Jen Psaki said.

Things got nastier off the record. Unidentified administration officials quoted by columnist Jeffrey Goldberg in The Atlantic magazine described the Israeli prime minister as too “chickensh-t” to reach an accommodation with the Palestinians and said his “near-pathological desire for career- preservation” has him playing to his domestic base by settling Jews in east Jerusalem and the West Bank.

Netanyahu retorted by vowing to stand up for Israel’s security against “anonymous sources” who don’t share his country’s concerns.

Israel captured east Jerusalem and the West Bank from Jordan in 1967 and annexed the former in a move that isn’t internationally recognized. The Palestinians claim both territories for the core of a state that would also incorporate the Gaza Strip.

Personality Clash

The U.S. provides $3 billion in military aid annually to Israel and backs it by vetoing United Nations Security Council resolutions that the Israelis regard as damaging. These policies have continued under Obama, whose administration has authorized additional spending on Israel’s security beyond the annual aid.

Yet from the beginning of their near-parallel tenures, Netanyahu has had personality clashes and deep ideological differences with Obama, people close to him said. The prime minister has built his political career on taking tough security stances toward Israel’s Arab neighbors, while Obama came into office pledging to strengthen U.S. ties throughout the region, in part by resolving the Israeli-Palestinian conflict.

The latest feud comes amid mounting speculation that Netanyahu’s ruling coalition will be reshuffled or collapse.

Coalition Squabbling

Members of his Likud party and Economy Minister Naftali Bennett’s pro-settlement Jewish Home faction have repeatedly demanded more construction in east Jerusalem and the West Bank. Finance Minister Yair Lapid’s Yesh Atid and Justice Minister Tzipi Livni’s Hatenuah have been openly critical of the collapse of peace talks.

The latest round of U.S.-led negotiations between Israel and the Palestinians broke down after nearly nine months in April. Each side blamed the other, with Palestinians saying settlement construction is a sign of bad faith and Israel saying it continued to build settler homes during previous rounds of talks. About 550,000 Jewish Israelis have moved to east Jerusalem and the West Bank since 1967.

Netanyahu’s confrontation with Obama could be a tipping point for early elections or the replacement of Yesh Atid and Hatenuah with two ultra-Orthodox religious parties now outside the coalition, according to a person he consults on political issues. Both the prime minister’s own political constituency and the religious parties -- Netanyahu’s traditional coalition allies -- endorse settlement construction.

Endorsed Statehood

A poll by Shiluv Millward Brown Market Research for Channel 2 television released on Oct. 5 found that 55 percent of Israelis rated Netanyahu’s performance as prime minister as good, up from 32 percent on Aug. 27, right after the 50-day war in the Gaza Strip ended. The poll of 501 Jewish Israeli adults had a 4.5 percentage point margin of error.

Netanyahu believes he did everything he could to work with the U.S., including endorsing the establishment of a Palestinian state and quietly freezing West Bank settlement construction, people who know his thinking said. Those concessions were dismissed as insufficient by Palestinians while denting his reputation as a security hawk, they said.

Drawing profane insults from an unidentified U.S. official caps six years of hostility that has gotten so bad that Netanyahu figures it hurts Obama more than it hurts him, says Israel’s former ambassador to Washington, Michael Oren.

‘Vulgar Language’

“When a guy close to the leader of the world’s greatest superpower uses such vulgar language to describe the prime minister of a close ally, I don’t think that’s good for the U.S.,” Oren, ambassador-in-residence at the Washington-based Atlantic Council, said in a telephone interview. “Leaders of other nations, friendly and unfriendly, are looking at this and making conclusions on whether this administration is reliable.”

There’s a sense relations can’t get much worse, according to current and former Israeli officials. Some said Netanyahu is probably counting on Congress to limit Obama’s options to penalize Israel, and expects his Congressional backing to grow after midterm elections.

Tensions between U.S. and Israeli leaders is nothing new. Former President George H. W. Bush clashed repeatedly with Likud Premier Yitzhak Shamir over settlements and peacemaking, and rejected Israel’s request for $10 billion in loan guarantees. Netanyahu, in his first term in the late 1990s, had rocky relations with Bill Clinton over those same issues.

Top Priority

Likud officials say the Obama administration has been especially critical of settlement construction, even if it’s taking place in areas that Netanyahu’s predecessors have said should remain under Israeli sovereignty in any peace deal. The personal criticism has also been unusually strident, with his allies incensed that the U.S. official told Goldberg that the Israeli leader is “scared to launch wars” and a “coward” on the Iran nuclear threat.

Iran has been Netanyahu’s highest priority issue, and he’s been humiliated that Obama hasn’t backed him by insisting the Iranians give up all uranium enrichment capability, a former adviser said. The U.S. is making a big mistake if it thinks he is bluffing on his willingness to use military action against Iran, the former adviser said. Netanyahu rejects Iran’s assertion that it doesn’t want to build nuclear weapons.

Zalman Shoval, who served two separate terms as the prime minister’s ambassador to Washington, cites books written by former Obama administration officials that raised questions about the president’s resolve in security matters.

“If you have to judge who is more trusted, I think Israeli public opinion leans toward Netanyahu,” he said.