The Pentagon's Defense Intelligence Agency has quietly elevated Israel to the highest tier on its counterintelligence threat scale, a designation usually reserved for hostile powers, amid mounting fears that one of America's closest allies is running an aggressive espionage campaign against senior Trump administration officials managing the war with Iran.

The White House and the Israeli government were publicly denying the account.

The DIA circulated the new assessment in an internal notice in recent weeks, raising Israel's threat designation to "critical," according to two U.S. officials and one former U.S. official who spoke to NBC News.

The seven-page document, which includes a chart, concludes that Israel's human and technical intelligence collection capabilities aimed at the United States have reached that critical threshold and cites a series of specific incidents that prompted the change.

The New York Times, in a companion report, identified the targets as officials closest to Iran policy: Steve Witkoff, Trump's special envoy; Elbridge Colby, the Pentagon's policy chief; and Colby's deputy, Michael P. DiMino IV.

The Times reported the reassessment followed discoveries that surveillance software had been covertly installed on the phones of U.S. personnel operating in Israel, and quoted one senior official describing the Israeli effort during President Donald Trump's second term as "unhinged."

The Israeli embassy in Washington rejected the reporting outright.

A spokesperson called the account "completely false," saying, "Israel does not gather intelligence on American entities, let alone US government officials."

A White House official said, "This entire story is false and sourced to someone who doesn't have any knowledge of what's going on," according to NBC News.

The reassessment lands at a brittle moment.

Trump and Israeli Prime Minister Benjamin Netanyahu have clashed openly over the path out of the Iran war the two countries launched on Feb. 28, with a ceasefire holding since early April.

Trump is pursuing a negotiated settlement; Netanyahu has pressed for resumed bombing and resisted U.S. pressure to scale back Israeli operations against Hezbollah in Lebanon.

Trump told reporters this week he had called Netanyahu "crazy" during a tense phone call.

The practical effect, officials told NBC, is mostly defensive: extra caution by U.S. personnel traveling to Israel or meeting Israeli counterparts, with daily intelligence-sharing on the Iran war so far untouched.

The sharper risk, two former officials said, is to trust itself between governments already split over how the war should end.