Israeli Defense Minister Ehud Barak began a round of meetings with top U.S. officials yesterday in a bid to head off an increasingly sharp dispute between the United States and Israel over the expansion of Jewish settlements in Palestinian territory.

Israeli officials have been stunned by the demands of top Obama administration officials that Israel halt settlement growth throughout the West Bank, and Barak was said to be carrying compromise proposals focusing mainly on dismantling unauthorized settlement outposts. He met in New York yesterday with special envoy George S. Mitchell, and will meet with Vice President Biden, national security adviser James L. Jones and Defense Secretary Robert M. Gates in the coming days.

Barak, the leader of the Labor Party, is a former Israeli prime minister who during the Clinton administration nearly achieved a peace deal with Palestinians. But he is part of a government that is skeptical of efforts to create a Palestinian state and has resolutely rejected President Obama's demands on settlements.

The Bush administration, under a secret agreement with Israeli governments, spoke publicly against settlement growth but tacitly accepted natural population growth in settlements that Israel expected to keep in a peace deal with the Palestinians. The Obama administration has refused to accept such arrangements and has instead demanded a complete freeze.

Obama said yesterday in an interview with National Public Radio: "A two-state solution . . . is going to require that each side -- the Israelis and Palestinians -- meet their obligations. . . . I've said very clearly to the Israelis, both privately and publicly, that a freeze on settlements, including natural growth, is part of those obligations."

Israeli Prime Minister Binyamin Netanyahu rejected Obama's demand in a meeting yesterday with his country's parliament [World Digest, Page A7].

The Obama administration has also indicated it does not consider itself bound to the terms of a 2004 letter that President George W. Bush gave then Israeli Prime Minister Ariel Sharon saying Israel could expect to keep major settlements in a peace deal. Late Friday, State Department spokesman Ian Kelly issued a statement pointedly declining to reaffirm that the letter carried over to the current administration. He instead reiterated that there must be a "stop to settlements."

A meeting in London last week between Mitchell and Israeli envoys went poorly, Israeli sources said, with Mitchell rejecting compromise proposals floated by the Israelis. "Our position hasn't changed one bit, and they know that," said a senior U.S. official after Mitchell's meeting with Barak. "We want them to stop settlement activity."

A State Department official, speaking on the condition of anonymity, said one factor in the administration's determination is that satellite photos indicated that Israel had not held to the private bargain it had made with the Bush administration.

"In Israel, we are a bit alarmed at the statements coming out," one Israeli official said yesterday, speaking on the condition of anonymity because of diplomatic sensitivities. "It is a bit too much too soon." He wondered if the comments were intended to ease the way for Obama's speech to the Muslim world in Cairo on Thursday, since Israeli settlements are frequently denounced by Arab governments.

Ghaith al-Omari, a former Palestinian negotiator who is advocacy director for the American Task Force on Palestine, said the Obama administration's unity and toughness on the issue have been impressive. "The president has put his own prestige on the line," Omari said. "The thing to watch is whether he will apply a similar amount of pressure on the Arabs" on such issues as financial support for the Palestinian Authority.

In focusing on Israeli settlements, Obama has identified an Achilles' heel in the strong support for Israel in the U.S. Congress, where there is increasing angst among lawmakers that settlements are a hindrance to peace efforts.

There are more than 120 settlements in the occupied West Bank that are legal under Israeli law but not internationally. The Fourth Geneva Convention, which Israel ratified in 1951, forbids an occupying power from transferring "parts of its own civilian population into the territory it occupies," but Israel disputes that this provision applies to settlements. Israel seized the West Bank and other territories in the 1967 Arab-Israeli war.

Israel in 2003 committed itself to removing 26 unauthorized outposts. Israeli and Palestinian organizations say dozens of other settlements are illegal, or include structures that should be taken down.