It is a "matter of long-standing practice and principle" that the president does not meet foreign leaders engaged in an electoral campaign, a White House spokeswoman, Bernadette Meehan, said Thursday.
Netanyahu will address a joint session of Congress in early March -- just a few weeks before Israelis go to the polls on March 17.
But the focus of Netanyahu's address -- Iran -- as much as his timing is giving the White House heartburn.
Obama's allies fear the trip could be used by Israel and by the US Republicans, who control Congress and issued the invitation, to undercut nuclear talks with Tehran just as they appear poised to bear fruit.
The West and Israel accuse the Islamic republic of trying to build a nuclear bomb, a charge it denies.
The complex agreement with the so-called P5+1 group of global powers would subject Iran to safeguards designed to ensure its nuclear program can only be used for power generation or non-military research.
In a statement, Netanyahu said he wanted the "opportunity to share Israel's vision" on how to deal with the threat from Iran and Islamic extremists.
The White House initially gave an icy response to news of Netanyahu's trip, saying it had not been informed -- a break with protocol.
Twenty-four hours later, the Obama administration announced that neither the president nor his Secretary of State John Kerry would meet Netanyahu.
BATTLE OVER NEW IRAN SANCTIONS
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The Israeli prime minister -- and his Republican Congressional hosts -- have expressed deep skepticism about a brokered deal, believing Iran cannot be trusted to keep its side of the bargain.
US lawmakers have even sketched plans to impose fresh sanctions on Iran, legislation Obama has said would wreck talks and which he has pledged to veto.
"The president has been clear about his opposition to Congress passing new legislation on Iran that could undermine our negotiations and divide the international community," said Meehan.
Four European foreign policy chiefs issued a joint call in support of Obama's position Thursday.
"Introducing new hurdles at this critical stage of the negotiations," they wrote in the Washington Post, "would jeopardize our efforts at a critical juncture."
Negotiators hope to have a framework deal in place by March 31, leaving the last technical details to be worked out by June 30.
While Israel and the United States remain close allies, Obama and Netanyahu have publicly clashed over Iran and issues linked to the Middle East peace process.
In a statement, Netanyahu tried to diminish the diplomatic damage caused by the controversy.
He said the speech would be an opportunity for him to "thank President Barack Obama, the Congress and the American people for their support of Israel."
The White House said Obama had talked to Netanyahu more than any other leader and the pair had had many conversations on the issue of Iran.
"I am sure they will continue to be in contact on this and other important matters," said Meehan.