Netanyahu's canceling USA trip not a snub: White House

The two incidents follow a rash of Palestinian assaults on Tuesday, including a stabbing spree that killed an American student near where Vice President Joe Biden was meeting with Israel's former president. Altogether one Israeli was killed and 15 injured, including two gravely hurt Border Guards policemen in Jerusalem.

The White House said Netanyahu had been planning on meeting with Obama and members of the administration around the same time as the American-Israel Political Affairs Committee was set to hold its annual conference, either March 17 or March 18.

Tensions hit a new high when Netanyahu, fighting Obama's policy for a deal with Iran on its nuclear programme, accepted a Republican invitation to address Congress on the issue in March, denouncing the accord as it was being negotiated.

President Barack Obama meets with Prime Minister Benjamin Netanyahu in the Oval Office in 2014.

Israeli newspaper Haaretz quoted sources in Netanyahu's office who said he chose to cancel the visit because of the ongoing process for this year's USA presidential election and the failure of both sides to reach an agreement on a new military aid package.

"We were looking forward to hosting the bilateral meeting, and we were surprised to first learn via media reports that the prime minister, rather than accept our invitation, opted to cancel his visit", White House National Security Council spokesperson Ned Price said in an emailed statement.

Around 29 Israelis and 170 Palestinians have been killed since October.

USA military aid to Israel has amounted to more than $124.3 billion since it began in 1962, according to a United States congressional report, released late a year ago.

Mr Biden may also focus on supporting nascent reconciliation talks between Israel and Turkey.

Later in the day, Biden, who has visited the Gulf during his trip and plans to travel to Jordan next, was due to meet Palestinian President Mahmoud Abbas in the West Bank.

Biden and Netanyahu also plan to talk about the fight against the Islamic State group. The two countries have had strained relations since 2010 when nine Turkish activists on the Gaza Freedom Flotilla were killed by the Israeli navy.

During the Second Intifada, Palestinian terrorist organizations habitually staged outbreaks of extreme violence whenever a high-ranking U.S. official visited Israel or Ramallah.

Interviewed by Israel Radio on Wednesday, Yaalon did not refer to the MOU but said: "There are areas in which we know how to insist on our security interests, even when our great friend (the United States) makes offers that do not suit us".

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