Yuval Steinitz, chairman of the Israeli parliament's foreign affairs and defence committee and an ally of Prime Minister Ariel Sharon, said on Tuesday ties were now at crisis point but stressed that Israel must fight to retain a measure of independence from its key ally.
The comments came after the Pentagon confirmed on Monday that the Bush administration had raised concerns with Israel about its sales and transfer of military equipment and technology to China.
The formal indictment of a Pentagon analyst on charges of passing classified information to a pro-Israel lobby group served as a further reminder that all was not well in the relationship.
The support of US President George Bush has been vital for Sharon in his efforts to secure approval for his controversial plan to pull troops and settlers out of the Gaza Strip, an issue that will top the agenda of Secretary of State Condoleezza Rice's visit to Jersualem this weekend.
Sharon has been trying to play down the China sales row, declining to make it a major issue on his recent trip to the US, seemingly fearful of upsetting Washington with the start of the Gaza pullout now just two months away.
But Steinitz said there was no denying the seriousness of the situation.
"There is a crisis. It has been going on for about a year, and to my great regret, even Sharon's visit to Washington didn't resolve this crisis"
chief of Israeli parliament's
committee on foreign affairs
"There is a crisis. It has been going on for about a year, and to my great regret, even Sharon's visit to Washington didn't resolve this crisis," he said.
"There is no doubt that relationship with the United States is critical to Israel. But, with all the enormous importance of US diplomatic, economic and military help, Israel must keep its independence and also some reciprocity in this relationship," he said.
Two months ago, Washington imposed a series of sanctions on Israel's defence industry following a controversial weapons deal in which Israel was to upgrade a consignment of drones it had sold to China.
The deal provoked US anger and raised concerns that advanced American defence technology contained in Israeli equipment could be used against Taiwan.
The Israeli media reported that Washington had since barred the Israeli defence industry from involvement in key military development projects and had frozen the transfer of sophisticated technological equipment to its Middle Eastern ally.