US President Barack Obama (R) shakes hands with Israel's Prime Minister Benjamin Netanyahu in the Oval Office at the White House in Washington, May 20, 2011. [Photo/Agencies]

WASHINGTON - Israeli Prime Minister Benjamin Netanyahu denied, before a speech on Sunday by President Barack Obama to a pro-Israel group, they were locked in crisis after their public dispute on Middle East peace.

"The reports of a disagreement have been blown way out of proportion," Netanyahu was quoted as saying on Saturday by a spokesman.

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At the White House on Friday, Netanyahu bluntly rejected Obama's vision for the boundaries of a Palestinian state in the occupied West Bank and Gaza Strip, in what appeared to be the opening of a deep divide between Israel and the United States.

In a sharp rebuke to Israel's closest ally, Netanyahu told Obama his endorsement in an address on Thursday of the Palestinian demand to go back to Israel's 1967 frontiers -- meaning big land concessions -- would leave Israel indefensible.

Netanyahu's latest comments did not contain any change to that position.

But as Obama prepared to address the annual assembly in Washington of the pro-Israel lobby organization AIPAC, where he could face a cool reception from some delegates, Netanyahu appeared to be trying to calm any anger toward the president.

"It's true we have some differences of opinion, but these are among friends," the spokesman quoted him as saying.

Netanyahu believed that Obama had "shown his commitment to Israel's security, both in word and in deed," the spokesman added. "And we are working with the administration to achieve common goals."

The spokesman did not define those shared goals, but Israeli officials have cited Obama's opposition to a Palestinian bid to win UN recognition of a state in the September in the absence of peace talks, and to Iran's nuclear program.