CAIRO, Egypt (AP) _ Egypt's boycott of an economic conference with Israel, in defiance of U.S. diplomacy and pressure, reflects growing Arab anger over an impasse in Middle East peace negotiations.

President Hosni Mubarak's reasons did not differ _ like others, he blamed Israeli Prime Minister Benjamin Netanyahu for the deadlock and refused to reward him with participation in the meeting.

But Egypt was set apart from the other Arab states by one compelling reality: $2.1 billion annually in American aid, which Egyptians have come to take more or less for granted since President Anwar Sadat made peace with Israel in 1979.

Relations between the United States and its main Arab ally have seen better days, and Mubarak's decision this week came at a particularly frosty time in those ties. Mounting differences on Iraq and Libya suggest the two countries often have less in common than they admit and that America is having more and more trouble making things go its way in a region it has considered strategic since World War II.

More important for Egypt, Mubarak's decision raises the question: Can the Arab world's most populous country strike out on its own with a foreign policy independent of Washington?

``We are not lackeys of America,'' said Tahsin Bashir, a political analyst. ``We have our own national interest to keep.''

Anger at Israel in the Arab world is at its highest level in recent memory. It is a resentment that takes the form of sometimes bizarre conspiracy theories floating through Cairo _ such as Israeli agents infecting hapless Egyptians with AIDS _ to the decision to boycott the economic conference in Doha, Qatar, that starts Sunday.

Most Egyptians see U.S. support as the force behind Netanyahu's hard line. At the very least, they say, Netanyahu will never seek conciliation in the absence of U.S. pressure.

The anger over the perceived indifference has grown even more acute during this month's standoff between Iraq and the United States over U.N. weapons inspectors _ a crisis in which many Arab commentators have suggested Washington is too eager to start a fight.

The tendency to see the worst in U.S. policy points to a growing phenomenon across the region: a loss of U.S. clout, analysts say.

``The Arabs have gotten sick of the U.S. heavy-handed approach to the area,'' the state-run Egyptian Gazette said Thursday.

In recent months, the United States put pressure on Egypt and other Arab countries to attend the Doha meeting, even dispatching Undersecretary of State Stuart E. Eizenstat to the region last month. He told Egyptian officials that it was important ``to divorce political considerations from an economic conference.''

The decision by Secretary of State Madeleine Albright to attend added a high-profile U.S. presence to a conference Washington sees as a way to integrate Israel into the region.

In refusing to send a delegation, Mubarak was quick to add that relations with the United States remained ``good and friendly.''

But the decision followed Egypt's opposition in the U.N. Security Council to any threat of force against Iraq for its threat to expel American inspectors. Fraying relations as well was a report leaked in Washington that Egyptian agents took part in the kidnapping of a Mansour Kikhia, a Libyan dissident, and turned him over to the Libyan government which is believed to have executed him in 1994.

The latter dispute particularly angered Mubarak, who called the charge baseless and suggested the U.S. government was trying to get back at Egypt for convicting an Israeli on spying charges.

As of yet, there is no serious move to cut U.S. aid, which is crucial to Egypt's 440,000-man army.

But it has prompted speculation on whether Egypt can afford to defy U.S. policy over the long haul.

Egypt last wielded a policy independent of Washington under Gamal Abdel-Nasser in the 1950s and 1960s, but war with Israel and a collapsing economy forced him into the arms of the Soviet Union.

His successor, Sadat, expelled Soviet advisers in 1972, opening the way for the growing alliance with Washington.

Most commentators agree that Egypt, simply put, no longer has the muscle _ either politically or economically _ to go it alone, however unpopular that might prove.