Relations between the White House and Benjamin Netanyahu's government have been strained
Israel has strongly denied a report
that it spied on US-led talks on Iran's nuclear programme in order to
build a case against a deal.
A senior Israeli official told the BBC that the claims, reported in the Wall Street Journal, were "utterly false".
The Journal said the White House had been particularly angered that Israel allegedly sought to share confidential details with US lawmakers and others.
Many Republicans in Congress are opposed to a deal with Iran.
Earlier this month, Israeli Prime Minister Benjamin Netanyahu told the US Congress that a deal being discussed could "pave Iran's path to the bomb".
The US, UK, France, Germany, Russia and China are seeking to reach agreement to curtail Iran's nuclear programme in exchange for sanctions relief.
They fear Iran wants to build a nuclear bomb - something Iran denies, insisting it is merely exercising its right to peaceful nuclear power.
Israel is not a party to the negotiations although it feels particularly threatened by the possibility of a nuclear-armed Iran.
The sides aim to reach a framework deal by the end of March.
World powers and Iran have a 31 March deadline to reach a framework deal According to Tuesday's report in the Journal, Israel began eavesdropping on the talks last year and also acquired information from confidential briefings with US officials and diplomatic contacts in Europe.
The White House uncovered the operation, the report said, when US intelligence agencies spying on Israel intercepted messages among Israeli officials that could only have come from closed-door talks.
But it was Israel's sharing of inside information with US lawmakers and others that particularly angered the White House, an official said.
"It is one thing for the US and Israel to spy on each other. It is another thing for Israel to steal US secrets and play them back to US legislators to undermine US diplomacy," the senior US official was quoted by the Journal as saying.
A senior official in Mr Netanyahu's office told the BBC on Tuesday: "These allegations are utterly false.
"The state of Israel does not conduct espionage against the United States or Israel's other allies. The false allegations are clearly intended to undermine the strong ties between the United States and Israel and the security and intelligence relationship we share."
The report comes amid tense relations between the White House and Mr Netanyahu's government.
The Israeli prime minister angered Washington in his recent re-election campaign when he said he would not allow a Palestinian state if he was returned to office.
He later tempered his statement, saying he did want a two-state solution, but that "circumstances have to change".
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