It’s arguably the most blistering public spat of the post-Sept. 11 world of western diplomacy, and it’s coming out of two unlikely corners – longtime friends Israel and the United States.

President Bush openly endorses the possibility of a Palestinian state, and Israeli Prime Minister Ariel Sharon immediately says: don’t even think about selling out Israel to appease the Arabs like the British and the French did Czechoslovakia to appease Hitler on the eve of World War II.

Washington fires back: "The prime minister's comments are unacceptable," said Bush's spokesman, Ari Fleischer. "The United States is not doing anything to try to appease the Arabs at Israel's expense."

By the end of the day Friday, both sides said all was okay. Secretary of State Colin Powell said the “little cloudburst” had been worked out in a telephone call with Sharon, and the prime minister’s office issued a conciliatory statement.
 
"The prime minister requested to forward to the president his appreciation of the bold and courageous decision of the president to fight terrorism," the statement said. "Israel fully supports this position and cooperates with it."

But the spat and its origins underlie the tightrope Bush walks as he tries to forge a lasting coalition for what is sure to be a drawn out conflict against international terrorism. On one side are historic allegiances to Israel, on the other the need for Arab support in the effort.

As part of the campaign to win Arab and Muslim support, the U.S.-led alliance has approached several hard-line Arab states, including Syria, a country listed by Washington as a sponsor of terrorism. Israel has protested vehemently, but with little success.

George Washington University professor Nathan Brown said Sharon’s outburst probably reflects some deeper concerns about U.S. pressure on Israel right now.

“I think Sharon will regret his comments,” Brown said. “While it basically raises tensions with the United States, it might speak well to his domestic constituency, especially his right-wing constituency.”

The Israeli leader is frustrated by Washington's apparent unwillingness to target anti-Israeli militant groups in the global campaign against terrorism.

Israeli Cabinet Minister Tsipi Livni said Friday that Bush's endorsement of eventual Palestinian statehood was seen by Israel as a reward for Palestinian attacks on Israeli civilians, coming as it did on the same day as a fatal Palestinian raid on a Jewish settlement.

"The message that the Arab world is getting now is that terror pays," said Livni, who acts as a spokeswoman for the government.

Israeli Yossi Shain, a visiting professor to Georgetown University and former head of the political science department at Tel Aviv University, said the sense in Israel is that “America is riding the wave on the Israelis’ back.”

“As Americans are trying to make a coalition there is a sense that the U.S. is making a big error here,” that they are “paying off” Arab countries that haven’t yet decided whether to help the U.S fight terrorism in the region, Shain said.

Arabs are, predictably, applauding Bush’s overtures vis-à-vis Palestinian statehood. From their perspective, Israel has long enjoyed a monopoly on U.S. attention when it comes to the Middle East issues, and it is upset at the sudden loss of clout.

In making such caustic statements, Sharon wants to “stimulate the Israeli lobby in Congress and perhaps his friends in the Pentagon to reverse the course of action,” said Clovis Maksoud, a former U.S. delegate to the League of Arab States at the United Nations, putting Israel back into the forefront of American interest and policy.

But most observers of the tumultuous world of Middle Eastern politics see the coalition now coming together, both Arab and Israeli, as benefiting everyone in the long run. John Hulsman, a foreign policy expert at the Heritage Foundation in Washington D.C., contends that a concerted global effort against terrorism can only be good for Israel.

“Mr. Sharon is afraid that his relationship and his position with the United States will be imperiled and I think it’s entirely understandable that he will be fearful for his own country,” Hulsman said.

“But there are 50-year ties with Israel that aren’t going away – I think he (Sharon) is really overreacting to the legitimate U.S. desires to enjoin a broad-based coalition,” Hulsman said.

The Associated Press contributed to this report