JERUSALEM - Sirens blared across Israel yesterday as the nation carried out its largest-ever "doomsday" drill meant to simulate a catastrophic attack.

The training, however, was overshadowed by a deepening anxiety in Jerusalem that Israel is heading for a political showdown with President Obama over the government's refusal to stop building Jewish homes in the predominantly Palestinian West Bank.

Yedioth Ahronoth, Israel's largest daily newspaper, carried a front-page story yesterday bluntly titled: "The American Threat."

The growing apprehension comes as Obama prepares to make an appeal to the Islamic world in Cairo, Egypt, tomorrow that is seen as a chance for the United States to launch a new, more cooperative era with Arab nations in the Mideast.

Central to the success of Obama's attempts to reshape America's image in the region will be a shift in U.S. policy toward Israel. For many, the heart of that discussion is Israel's refusal to stop building Jewish settlements in the West Bank.

To underscore the importance of the issue, Obama yesterday told Israeli Defense Minister Ehud Barak that Jerusalem must stop allowing West Bank settlements to grow, reiterating his stance just hours before leaving on his Mideast trip. Barak also met in Washington with Obama's national security adviser, James L. Jones, but in the end, both sides left the discussion in disagreement over the settlements.

Under the six-year-old road map for Middle East peace, drafted by the Bush administration, Israel was to stop all settlement construction in the West Bank. Israeli leaders accepted the plan but imposed their own interpretation of the proposal, arguing that they had the right to continue building in existing settlements.

The Bush administration never seriously challenged Israel on this point. Obama, however, has stated plainly that Israel must honor its commitment to stop all settlement construction. Period.

"It is important for us to be clear about what we believe will lead to peace and that there's not equivocation and there's not a sense that we expect only compromise on one side," Obama told National Public Radio. "It's going to have to be two-sided."

That stand has set off alarms in Jerusalem, where Prime Minister Benjamin Netanyahu has said Obama's call for Israel to accept the road-map conditions was "unrealistic."

In an attempt to offer Obama a goodwill gesture before the Cairo speech, Israel demolished a small number of trailers in rustic outposts established by extremist Jewish settlers who are opposed to ceding West Bank land so Palestinians can establish a state.

But those steps appeared not to be enough for Obama, who has stepped up public pressure on Israel to do more.

"The issue of settlements is not a very comfortable one for Israel's backers," said Oded Eran, director of Israel's Institute for National Security Studies. "Israel is divided about this issue, and its friends are divided about this issue, so I think if the president concentrates on settlements, it will be difficult for Israel to call on its friends to defend them."

The biggest question for Israel now is: How far is Obama willing to go to apply pressure?

The United States has used its economic clout at times to try to change Israeli policies. During the presidency of George H.W. Bush presidency, Israel asked the United States for $10 billion in loan guarantees to help absorb a wave of immigrants from the former Soviet Union.

The money was held up as Israeli settlements continued to be built, and a compromise was finally reached. The guarantees were spread over five years, and each year the money spent on settlements was deducted from the loan guarantees. A similar deal was reached during the George W. Bush presidency in 2003.

Obama this week sidestepped questions when asked whether he was prepared to take similar steps. "One of the things, in the 24/7 news cycle, [that] is very difficult to encourage is patience," he said. "And diplomacy is always a matter of a long, hard slog. It's never a matter of quick results."