The first round of the contest between the US President Barack Obama and Israeli Prime Minister Benjamin Netanyahu did not draw blood. At their 90-minute meeting in Washington on May 18, the two circled each other warily, striving with studied politeness to conceal their considerable mutual antipathy. There was no disguising, however, the wide divergence of their views. The coming rounds promise to be more bruising.

Obama represents a political challenge such as Israel has not faced for many a decade. For the first time since at least 1967, Israel can no longer count on the unquestioning support of the president of the US. There will be no blank cheque for Israel from the Obama White House.

But there is far more to it than a mere cooling of the intimate relationship. Obama is, in effect, asking Israel to discard ambitions, patterns of behaviour and security doctrines, which have become ingrained in the Israeli psyche over the past six decades. He is demanding a radical change of thinking about Israel's borders, its long-term security and its place in the region.

Since the Six-Day War, every Israeli government has sought to expand the country's borders by the seizure of Palestinian territory. Clearly, for many Israelis, a 'Greater Israel' from the Jordan River to the Mediterranean remains the ultimate objective.

Even as Obama and Netanyahu were meeting last Monday, Israeli colonists announced that the government was accepting bids for new housing in a Jewish community in the Jordan Valley.

Obama is now saying that this expansion must stop. This is the heart of the problem. Unless Israeli colonies are not only halted, but also dismantled and rolled back, there can be no peace and no Palestinian state, such as Obama wants to bring into being, side by side with Israel.

To many Israelis - and not only to those on the Right - Palestinian statehood represents a deadly physical and ideological challenge. A Palestinian state, they fear, might eventually seek to eat away at Israel, in much the same way as Israel now encroaches on Palestinian territory. But beyond that, for many Israelis a Palestinian state threatens to undermine the legitimacy of their own national enterprise, since Israel was itself built on historical Palestine.

Israel detests Hamas because of its adamant refusal to recognise the legitimacy of what Israel did in 1948.

Israeli hawks such as Natanyahu have always believed that the Palestinian problem could be solved by the final military defeat and physical dispersal of the Palestinians. Indeed, some Israeli strategists speak candidly of turning Gaza over to Egypt and of expelling to Jordan the rump of the West Bank Palestinians.

To the dismay of such hawks, Obama is now reviving the hated notions of 'land for peace' and of Palestinian statehood, which they had thought buried forever.

Since its foundation, Israel has sought military hegemony over the entire Arab region. Its security was based on keeping its neighbours weak, while ensuring that it was itself stronger than any Arab combination, principles which were underpinned by its American ally with lavish financial aid, political support and advanced weaponry. An essential element in Israel's hegemony was its regional monopoly of nuclear weapons.

Israel and its American friends got used to the idea that the power of the US could always be mobilised to defeat Israel's enemies, whether real or potential. When the Iraq-Iran War of 1980-88 ended in a draw, Saddam Hussain and his large army began to look threatening. Israel feared a revival of Arab militarism on its eastern flank.

Throughout the 1990s, therefore, Israel and its neo-conservative friends in Washington pressed relentlessly for Saddam's overthrow as the first step to a thorough restructuring of the Arab world. Arab nationalism, Islamic movements and Palestinian militancy were all to be routed by the US, so as to make the region safe for Israel for the foreseeable future.

But it has not turned out that way. The Iraq war has been an unmitigated catastrophe for Iraq itself, of course, but also for the stability of the whole region. Without the counterweight of Iraq, Iran has been promoted into a regional superpower, and is now far more of a challenge than Iraq ever was. Islamic militancy and anti-Americanism have flared up across the Arab and Muslim world. As for the US itself, it has squandered its manpower, its finances and its reputation on a war that should never have been fought.

Obama knows this, and is determined that Israel will not again entrap America in a war.

Seen from Israel, Obama's call for a dialogue with Iran, and perhaps even a 'grand bargain' with it, could result in a threat both to Israel's military hegemony and to its nuclear monopoly. Rather than any sort of compromise over uranium enrichment, it wants Iran's nuclear facilities destroyed. Israel, Netanyahu said in Washington, retains the right to defend itself.

The US-Israel divide is very wide and deep. It is unlikely to be bridged without a fight.

Patrick Seale is a commentator and author of several books on Middle East affairs.