WASHINGTON, Aug. 4 — The Bush administration, looking for ways to press Israel to halt construction of a barrier separating its citizens from Palestinian areas, is considering a reduction in loan guarantees for Israel that were approved by Congress this spring, administration officials said today.

Any such punitive step by the United States toward Israel would mark a change in President Bush's longstanding efforts to avoid any kind of confrontation with the government of Prime Minister Ariel Sharon.

Aides to Mr. Bush and Mr. Sharon have gone out of their way for months to say that they have few disagreements and that all have been resolved amicably. Such talk was reiterated last week during Mr. Sharon's visit to the White House.

What is at issue in the administration's possible action is $9 billion in loan guarantees approved by Congress in the spring. They are intended for housing and commercial projects and were part of a package that also included $1 billion in military aid to help Israel cope with the effects of the Iraq war.

Administration officials, who disclosed the potential move, said that it was being considered in response to a campaign by Palestinian leaders, who say the barrier has cut Palestinians off from farms, homes, schools and workplaces.

The Palestinians also contend that it is aimed at establishing a de facto border for Israel in the West Bank and the Gaza Strip. The future boundary of Israel and a Palestinian state is supposed to be negotiated in talks between the two sides.

An Israeli official said tonight that word of the administration's move, which was first disclosed in the Israeli newspaper Haaretz, had not been transmitted to Mr. Sharon's government. "This takes us by surprise," he added...

...I’m not accepting this at face value, because the author of this article, Steven R. Weisman, is one of the New York Times’s most inveterate anti-Israel zealots—and I don’t trust what he writes...