US-Israel relations feature heavily in UK media coverage relating to Israel and the Middle East this morning. The FT carries a front page article in which it claims the US can “grapple with the Israeli government and congressional Republicans if it chooses to involve the UN in the peace process, or confront the Palestinians and many Europeans, who are close to giving up on Israel.” It also carries an opinion piece by David Gardner arguing for European diplomatic involvement and a UN Security Council resolution to insist that Israel ends the occupation. The BBC online reports comments by President Obama in which he referred to prospects for the Israeli-Palestinian peace process as “dim” and said he took Netanyahu at his word when he had said a Palestinian state would not be created under his premiership.

Meanwhile, the Times, Independent, Evening Standard and BBC and Guardian online include reports of US anger following the accusation by US officials that Israel spied on its nuclear negotiations with Iran, and the denial of the charges by Israeli ministers yesterday. The Guardian reports that House speaker John Boehner claims to be “baffled” by the reports, whilst the Times adds a brief profile of US-Israeli intelligence cooperation. The FT also includes a Q and A on the Iran talks, as well as an article about concerns of oil traders that progress in Iran talks could further reduce oil prices.

The Independent carries the latest in a series of reports by correspondent Kim Sengupta from Gaza, in which he interviews Khaled al-Batsh, Islamic Jihad’s political chief, and profiles the Palestinian armed group Islamic Jihad. The Times also includes a report from the Gaza Strip of women taking up arms for a future round of fighting.

The Telegraph reports on Benjamin Netanyahu’s apology to Arab-Israelis following his election day remarks, and also reports online about the challenges Netanyahu faces in forming a coalition. Meanwhile the Guardian includes a letter signed by the Chair of the Palestine Solidarity Campaign and several personalities including Brian Eno and Ken Loach calling for sanctions to change Israel’s policy.

The Times, as well as the FT, Telegraph and Guardian online, report on Saudi preparations to intervene in the conflict in Yemen to its south and prevent, “the formation of another Hezbollah on its southern border.”

In today’s Israeli media, all the papers lead with the tragic aeroplane crash in the Alps. The overall human disaster is the overwhelming focus, with Israel Hayom highlighting the 39-year-old Israeli who was among the victims. All the papers also prominently cover the allegations of spying on the P5+1 talks with Iran and the vehement denials by Israeli officials.  Both Yediot Ahronot and Maariv concur that in all likelihood Israel does try to intercept electronic communication, just like many governments do.  Yediot Ahronot further notes, the main problem here is the leaking of the story to the US media and the continued crisis between the White House and the Prime Minister’s office in Jerusalem.

Haaretz leads on the likely appointment of Moshe Kahlon as Finance Minister in the new government. This is the first announcement as newly elected Prime Minister Netanyahu as he looks to build the new coalition. Haaretz also reports Prime Minister Netanyahu and Naftali Bennett, the leader of Jewish Home party will today renew discussions on nation state and funding of NGO’s bills that were frozen during the last Knesset. Israel radio reports three people were arrested after a Molotov cocktail was thrown at a political rally in Jerusalem aimed at supporters of Eli Yishai’s Yahad. The rally was thanking supporters for their efforts, despite the party failing to pass the electoral threshold in last week’s election. Army radio notes the Labour court in Jerusalem will begin today to hear the case of the former caretaker of the Prime Minister’s residence Meni Naftali, whose is suing the Netanyahu’s for alleged mistreatment.