The point at issue is the right to convert someone to Judaism. A law now passing through the Israeli Knesset, which gives Orthodox rabbis a monopoly over conversion in Israel itself, has provoked a furious reaction from America's three million Jews who go to a synagogue but are not Orthodox.
"American Jews understand that the State of Israel is casting doubt upon their rabbis and, accordingly, upon the Jewish communities those rabbis serve," says Joseph Alpher, director of the Israel/Middle East office of the American Jewish Community. He says that already American Jews, who go to Reform or Conservative rather than Orthodox synagogues, are beginning to refuse to contribute to Israel, where the majority of Jews are Orthodox.
Ironically, the present Bill going through the Knesset with the support of the government is the result of a compromise which was supposed to conciliate American Jews. It is, in effect, a watered-down version of a Bill under which the 200,000 or more Jews converted by a Reform or Conservative rabbi in the US would no longer have been recognised as Jews in Israel. "The way Reform rabbis convert in the US is a joke," a senior member of the religious party Shas was quoted as saying. "You buy a certificate for $20 [pounds 12.50]."
The new law will only derecognise Reform or Conservative conversions carried out in Israel itself. Conversions in the US, Britain and the rest of the world will still be recognised. Even Orthodox rabbis see that derecognition of the right to convert by most American rabbis would lead to anger in the US, but American Jews still consider the legislation a slap in the face.
The conflict is also having important political consequences. Mr Alpher argues that the US Congress has already set a precedent by cutting aid to Israel. Despite the power of the Jewish political lobby, he says American politicians notice when the US Jewish Community is less active in its support for Israel.
He says: "It becomes easier for the US administration to put pressure on Israel."
In practice there is little sign of this. The American-Jewish community has always been one of the major pillars of the Democratic party. But it has exercised unprecedented influence in President Clinton's administrations."In the National Security Council seven out of 11 top staffers are Jews," says the Israeli daily Ma'ariv.
But Israel has few allies apart from the US. In the UN vote condemning the construction of the Jewish settlement at Har Homa in Jerusalem, the only country joining Israel and the US voting against the condemnation was Micronesia.
Leaders of the US Reform and Conservative movements will arrive in Israel this week to try to work out a compromise. But it will be difficult to dilute the message to American Jews, which one fundraiser described as being: "You are not as good a Jew as the Orthodox."