Israeli Prime Minister Binyamin Netanyahu was welcomed home Thursday night with signs reading "Obama, No You Can't" and "Netanyahu Stand Strong" after a trip to Washington that appeared only to widen a two-week-old rift between the close allies over Israeli housing construction.

The support expressed by a few dozen people at the entrance to Jerusalem belied widespread doubts here about Netanyahu's handling of relations with President Obama. The premier's tough U.S. visit came during a week in which Israel also found itself at odds with Britain, which on Tuesday expelled an Israeli diplomat over what it said was the use of forged British passports in an alleged Mossad operation.

Netanyahu had hoped to use his visit to defuse tensions sparked by the announcement of Israeli plans to build 1,600 homes in a disputed area of Jerusalem. The announcement was made during Vice President Biden's visit to Israel this month, and it thwarted what was supposed to be a celebration of fresh negotiations on talks toward an Israeli-Palestinian peace agreement. The Obama administration now says that failure to resolve the Middle East conflict is harming U.S. national security interests in the region.

Over the past year, Netanyahu "pushed the envelope with Obama," said Yossi Beilin, a former Israeli peace negotiator, referring to haggling over a full settlement freeze that had precluded a resumption of peace talks. Now that Obama has pushed back, Netanyahu "is worried and afraid," Beilin said.

The coalition issue

Some observers speculated that Netanyahu might be forced to consider bringing Kadima, the centrist party led by former foreign minister Tzipi Livni, his arch political rival, into his coalition to alleviate the tensions with the United States. But Gideon Ezra, a Kadima member, said that might not be possible because of resistance from within Netanyahu's Likud bloc: Incorporating Kadima would mean concessions such as halting construction in East Jerusalem and dismantling unauthorized settlement outposts in the West Bank, steps that Likud members oppose, Ezra said.

Others said Netanyahu would simply search for ways to buy time until the midterm U.S. elections in hopes that Obama would lose support and that more pro-Israel Republicans would be elected.

"The prime minister does not understand to what extent the current government's composition causes damage to its relationship with the U.S. and the international community," said Yoel Hasson, who advised Ariel Sharon when he was the prime minister. "I am most concerned about the long-term strategic partnership."

Deficit of trust

What is most clear now as the crisis in the U.S.-Israel relationship continues is that Netanyahu was truly stunned by the Obama administration's unprecedented willingness to criticize Israel over building in the annexed part of Jerusalem and that deferring negotiations on the city's future will become increasingly difficult if the news media continue to report on construction there.

The United States, like the rest of the world, has never recognized Israel's sovereignty over territory occupied in the 1967 war. Still, the two countries always "managed to work out a modus vivendi because more compelling strategic concerns trumped whatever they were quarreling about," said Dore Gold, who was a political adviser to Netanyahu during his first stint as prime minister more than a decade ago.

Gold cited Israel's 1997 decision to build the Har Homa development in East Jerusalem just after Netanyahu signed a deal turning over most of the West Bank city of Hebron to Palestinian control. At the time, the United States vetoed two proposed U.N. Security Council resolutions criticizing Israel for the project.

The difference was that then-President Bill Clinton believed Netanyahu could make progress toward peace, observers said. Obama does not appear to share that sentiment. "There was trust between the president and our prime minister," Hasson said. "Now we don't have it."

In a pre-Passover toast to city employees Thursday, Jerusalem's mayor, Nir Barkat, said of the current crisis: "The whole world is watching us. This obligates us, Jews and Arabs, to work together, without discrimination, to advance the city's interests."

Accomplishing that will prove difficult if Jerusalem remains a flash point between the United States and Israel in the coming months. The demands Obama presented to Netanyahu included continuing a partial settlement freeze once a 10-month moratorium expires later this year and expanding it to East Jerusalem, according to Yedioth Ahronoth, Israel's largest daily.

Beilin said Netanyahu understands, perhaps better than some of his Likud predecessors, that even if he believes "he is 100 percent right and the world is 100 percent wrong" on Jerusalem, "he cannot go on and destroy the relationships with the whole world."

But the prime minister is under fire not just abroad. He is also facing criticism at home.

On Friday, demonstrators plan to gather in Tel Aviv to protest the government's decision to block construction of an underground hospital emergency room in the city of Ashkelon, a move meant to appease an ultra-Orthodox coalition member who had threatened to resign because the facility would be built on an ancient cemetery.

The underground wing of Barzilai hospital was being built to protect patients from rockets fired from the Hamas-ruled Gaza Strip. Netanyahu's decision to block the construction led to the resignation of the Health Ministry's director general.

"People are really angry," said Nitzan Horowitz, an organizer of the protest and a member of the Israeli parliament from the secular Meretz party. "The coalition games Netanyahu is playing we simply can't accept."