By Michael A. Memoli, Tribune Washington Bureau (TNS)

WASHINGTON — President Barack Obama said Tuesday that preserving the nation’s credibility internationally requires re-evaluating the U.S. stance on Mideast peace talks and that recent comments by Israeli Prime Minister Benjamin Netanyahu have severely hurt chances for progress.

Obama said Netanyahu’s pledge on the eve of Israeli elections last week to oppose a two-state solution for Israelis and Palestinians made hopes for progress “very dim.” Netanyahu later backed off the comment, but Obama appeared to remain unconvinced that the prime minister is serious about negotiating with the Palestinians.

“What we can’t do is pretend that there’s a possibility of something that’s not there,” Obama said during a news conference. “We can’t continue to premise our public diplomacy based on something that everybody knows is not going to happen, at least in the next several years. … For the sake of our own credibility, we have to be able to be honest.”

The president’s comments were the latest indication of how Netanyahu’s recent behavior has exacerbated an already-frosty relationship between the two leaders and tested the traditional bond between the U.S. and Israel.

Obama and other officials have called out Netanyahu for his rejection of the two-state solution and a remark made about Israel’s Arab citizens that had racial overtones. Netanyahu has also emerged as a leading opponent to a possible deal on Iran’s nuclear program that is a major goal of the Obama administration.

Obama dismissed a focus on his personal relationship with Netanyahu as irrelevant to their policy differences.

“This can’t be reduced to a matter of somehow let’s all hold hands and sing ‘Kumbaya,’ ” he said. “This is a matter of figuring out how do we get through a real knotty policy difference that has great consequences for both countries and for the region.”

But Obama left unanswered a question posed to him about what, if anything, Netanyahu could do to convince Obama that he could be relied on to work toward peace in the region.

Senior U.S. officials also alleged in a Wall Street Journal report published late Monday that the Israeli government was attempting to undermine the Iran talks through a coordinated effort that included spying on the confidential discussions and other briefings, then sharing what it found with U.S. lawmakers.

Obama did not address that report in his news conference but said his administration has regularly briefed lawmakers and Israeli officials on the status of talks.

If a deal is reached, the president pledged “significant transparency.”

“If, in fact, an agreement is arrived at that we feel confident will prevent Iran from obtaining a nuclear weapon, it’s going to be there for everybody to see,” he said. “People are going to be able to lift up the hood and see what’s in there.”

Leading lawmakers cast doubt on the spying claim, which comes as the talks between Iran and six major world powers including the United States near a potential pivotal stage this week and as the administration campaigns to prevent legislation that might give Congress a say on any deal.

House Speaker John A. Boehner, R-Ohio, told reporters he was “baffled” by the report on Israeli intelligence-sharing. “I’m not aware of that,” he said.

Sen. Bob Corker, R-Tenn., the chair of the Foreign Relations Committee, said he’s discussed the negotiations with Israeli officials and other foreign leaders, but denied he learned anything from them he had not gleaned elsewhere.

“I think you all understand what’s happening here. You understand who’s pushing this out,” Corker said, implying that the Obama administration was seeking to neutralize an Israeli lobbying campaign against a nuclear agreement.

Israeli officials flatly rejected the claims of unidentified U.S. officials in the report.

“Israel does not spy on the U.S. _ period, exclamation point,” Intelligence Minister Yuval Steinitz said en route from Paris, where he met with French officials to convey Israel’s concerns about an emerging nuclear agreement with Iran.

Steinitz said the accusations were aimed at undermining Israel’s “excellent intelligence cooperation” with the United States. Israel will continue dialogue with the U.S. on Iran despite grave differences on an agreement he called “bad, full of holes and dangerous to Israel, the Middle East and the entire world.”

Throughout the nearly two years of talks over Iran’s nuclear program, the Obama administration has warned lawmakers against moving legislation that may jeopardize any agreement.

Corker has co-sponsored legislation that would create a process by which lawmakers could vote to approve or disapprove any final agreement. A separate bill would authorize new sanctions in the event a deal isn’t finalized or if Iran reneges on any commitments.

Both measures could come to a vote in April and have enough bipartisan support to reach the president’s desk. Obama has promised to veto them, but Corker and other Republican leaders are working to marshal support to overcome the veto.

Key Democrats including Sens. Robert Menendez of New Jersey and Dianne Feinstein of California, the leading members of the Foreign Relations and Intelligence Committees, respectively, also denied the substance of the new spying report.

(Special correspondent Batsheva Sobelman in Jerusalem contributed to this report.)