The United States will be more blunt in raising objections to Israel's settlement policies in the Palestinian territories than previous administrations, President Barack Obama told a U.S. radio network in an interview on Monday.

"Part of being a good friend is being honest," Obama told National Public Radio. "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 U.S. interests.

"We do have to retain a constant belief in the possibilities of negotiations that will lead to peace," he added. "I've said that a freeze on settlements is part of that."

When asked about Israel's refusal to commit to a complete settlement freeze, the president told NPR it was still too early to determine what measures the administration could take to pressure Jerusalem.

"It's still early in the process," Obama said. "They've [Israel] formed a government, what, a month ago?"

"We're going to have a series of conversations," the president told NPR. "I believe that strategically, the status quo is unsustainable when it comes to Israel's security," Obama said. "Over time, in the absence of peace with Palestinians, Israel will continue to be threatened militarily and will have enormous problems on its borders."

Tensions between the Obama administration and Benjamin Netanyahu's government are nearing crisis levels after senior American officials harshly criticized the prime minister and his settlements policies on Monday.

"The Israelis apparently wanted to check if we are serious on settlements, and they found out that we are," a senior official told Haaretz. "This has nothing to do with the speech in Cairo, and it's going to be our position after the speech in Cairo, because we believe it's in Israel's long-term security interests."

Last night Defense Minister Ehud Barak met in New York with the U.S. special envoy to the Middle East, George Mitchell. The American told Barak that the U.S. was no longer willing to return to the understandings between the Sharon and Olmert governments and the Bush administration, which allowed continued settlement construction.

Mitchell said the administration was particularly unhappy about the Netanyahu government's unwillingness to recognize the principle of two states for two peoples.

Mitchell also emphasized that the U.S. does not accept the concept of "natural growth" for the settlements.

"We did not hear from the Bush administration about any of these so-called understandings with Israel on the settlements - all of which were supposedly oral understandings between different people every time," said one senior American official.

"But we've never heard a thing about them - they certainly weren't formal agreements between our governments. "The Israelis want us to commit to oral understandings we have never heard about, but at the same time they are not willing to commit to written agreements their government has signed, like the road map and commitment to the two-state solution."

The disagreement over the understandings concerning the settlements produced an embarrassing encounter in London last week during a meeting between Mitchell, Deputy Prime Minister Dan Meridor and a number of Netanyahu's advisers.

At the meeting, the Israelis claimed there was a letter between former president George W. Bush and former prime minister Ariel Sharon stating that the settlement blocs would remain in Israeli hands, so construction is permitted there. Mitchell showed the Israelis that one of the letter's sections discusses the principle of two states for two peoples. "That is also written in the letter - do you agree to that?" he asked.

Despite the growing American pressure, which also came out in the leak to the New York Times that the U.S. intended to end its support for Israel in UN debates, Netanyahu continues to say he will not agree to a total freeze of construction in the settlements.

In a meeting of the Knesset Foreign Affairs and Defense Committee on Monday, Netanyahu said that "we will agree not to take any new territory, but we will not agree to freeze life in the settlements."