The cancellation follows a tense telephone call between the two Presidents last week, as reported by Debka.
Obama is 100% behind an attack on Iran, but many of his most senior military are not, recognising such an attack as an insane act. Similarly, Netanyahu continues to face similar opposition from the heads of the Mossad, Shin Bet and others.
So at first glance, Obama and Natanyahu have much to console each other with. Unfortunately for Obama, though, Hillary Clinton issued a forceful denial of any US involvement in violent activity in Iran, which effectively pointed the finger of blame at Israel. Netanyahu seems to have taken that quite badly, and in a fit of pique, has cancelled operation Austere Challenge 12.
Does this mean the US and Israel are drawing back from an attack on Iran?
Absolutely not. Exercises may have been cancelled, but the 9,000 newly arrived US troops are still there. And all the while, lurking in the background is the British Government, whispering in the ears of both Presidents. And Britain is for war.