Netanyahu's decision not to accept an invitation for talks with Obama in Washington later this month "surprised" the White House, which first learned of it through news reports.
The Israeli premier's office defended the decision by saying Netanyahu did not want to interfere in US presidential primary elections currently taking place.
Obama and Netanyahu have had a testy personal relationship, worsened by the Israeli premier's forceful opposition to the Iran nuclear deal, including in a speech to the US Congress.
Biden arrived in Tel Aviv late today afternoon and will hold talks with Netanyahu tomorrow. He is also scheduled to meet Palestinian president Mahmud Abbas.
A previous visit by Biden in 2010 was marred by the announcement of a major Israeli settlement project in annexed east Jerusalem.
The announcement drew a public scolding from Biden and it soured relations with Washington for months.
The White House has said that Biden will not be pursuing any major new peace initiatives during his visit, even though a wave of violence since October has killed more than 200 people.
Talks are expected to include discussions on the 10-year defence aid package for Israel, currently worth some USD 3.1 billion annually in addition to spending on projects such as missile defence, illustrating the importance of Israel's relationship with the United States.
But while Obama has resigned himself to not achieving any major breakthrough in the Israeli-Palestinian conflict, there have been suggestions he may seek to somehow kickstart peace efforts at a complete standstill for two years.
That has included speculation that the United States could break with traditional practice and support a UN resolution related to resolving the conflict, which Israel strongly opposes.
The United States has traditionally vetoed resolutions at the UN Security Council opposed by Israel.
"They are worried in Jerusalem that between the time of the election in November and the time that the actual president begins his term of office in January... President Obama might do certain things that the PM won't like," Jonathan Rynhold of Israel's Begin-Sadat Centre for Strategic Studies told AFP.
A former Israeli ambassador to the US and ex-adviser to Netanyahu said completing the deal was in the interest of both countries due to the evolving threats to them in the Middle East.
It was important for both to have "a projection to the common enemies of Israel and the United States of a very strong -- militarily strong - Israel," said Zalman Shoval.
"And therefore, I think these two things will not be linked.
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