Russia and Israel are at loggerheads over Moscow's alleged intention to sell modern missile systems to Syria.
Iskander is an updated version of the Soviet-era Scud missile
Israeli media reports that Prime Minister Ariel Sharon held a government meeting on relations with Moscow.
Israel is said to have discussed the issue with the US, but denies Russian media reports that it has recalled its Moscow ambassador.
Meanwhile, Syrian President Bashar Assad is expected in Moscow on 24 January, despite Israeli protests.
The visit has already prompted Mr Sharon to hold consultations with Washington on the matter, according to French news agency AFP.
Russian and Israeli media both suggest that among other reasons for the apparent cooling in relations between the countries is Israel's alleged financial support of Ukrainian opposition leader Viktor Yushchenko, who won the recent presidential election.
Russia had openly supported his rival candidate, the then Prime Minister, Viktor Yanukovych.
Newspapers also recall a number of recent spy scandals and Israel's determination not to extradite managers of the troubled Russian oil company Yukos, wanted in Russia.
The Russian newspaper Kommersant says that should Russia sell new Iskander missiles to Damascus, Syria will be able to hit any target on Israeli territory, except the southernmost areas.
The Israeli newspaper Haaretz adds that in the last few years, Syria has been humiliated by several Israeli air raids, which proved its anti-aircraft systems extremely inefficient.
Russia remains an important player in the Middle East, despite its former influence being eclipsed by that of the US.
On Tuesday, the Palestinian ambassador to Russia, Khairi al-Oridi, told the BBC Russian Service that the newly-elected Palestinian leader, Mahmoud Abbas, was likely to choose Moscow as the first foreign capital to visit in his new role. Mr Abbas spent his student years in the USSR.
In the last 15 years, Russia has significantly improved its political and trade relations with Israel, which in turn has been one of the few countries to unequivocally support Russia's "counter-terrorist operation" in Chechnya.
But some commentators say Moscow's approach to choosing clients on the weapons market has often jeopardized these relations.