The Italian prime minister was the only European leader to attend Trump's inauguration in 2025 and has sought to position herself as a bridge between Europe and his administration.
While ties with Israel were already becoming strained over the Gaza war, the relationship with Washington has been increasingly tense since US-Israeli strikes on Iran set off the Middle East war.
READ ALSO: 'Unacceptable': Meloni condemns Trump criticism of pope
Energy import-dependent Italy has been hit economically and has refused to get involved in the war, siding with European allies.
Trump's extraordinary criticism on Sunday of Pope Leo XIV's growing anti-war rhetoric also proved particularly contentious.
After an initial mild statement of support for Pope Leo against Trump's broadside on Monday, Meloni issued clearer criticism the same day, saying the US leader's words were "unacceptable".
Speaking on the sidelines of a wine fair in northern Italy on Tuesday, Meloni returned to the subject of ties with Israel and the United States, saying that allies should be frank with each other.
"When we don't agree, and I often don't agree, we have to say it" and "act accordingly," she told reporters.
"In view of the current situation, the government has for example decided to suspend the automatic renewal of the defence agreement with Israel," Meloni said.
Israel responded saying the suspension of the deal, which involves the exchange of military equipment and technology research, "will not affect Israel's security".
"We have no security agreement with Italy. We have a memorandum of understanding from many years ago that has never contained any substantive content," Israeli foreign ministry spokesman Oren Marmorstein told AFP.
Tensions between the two countries have risen over the past week after the Italian government accused Israeli forces of firing warning shots at a convoy of Italian UN peacekeepers in Lebanon.
Italy summoned Israel's ambassador in protest over the incident, which damaged at least one vehicle but caused no injuries.
On Monday, Israel summoned Italy's ambassador following comments by Italian Foreign Minister Antonio Tajani condemning "unacceptable attacks" on Lebanese civilians by Israeli forces.
Meloni 're-positioning'
Meloni is in a vulnerable position at home after losing a justice reform referendum last month -- her first political defeat and one that analysts put down in part to voters rejecting her closeness with Trump.
"She is re-positioning herself," Lorenzo Castellani, politics professor at LUISS University in Rome, told AFP.
Close ties with the US and Israel were creating "political problems" so she is "adapting to circumstances", he said.
Castellani said he believed that Italy would have "a more critical voice, while staying within existing alliances".
Her growing criticism of Trump got a strong response on Tuesday.
"I'm shocked at her. I thought she had courage, but I was wrong," Trump told Corriere della Sera in an interview.
Echoing her criticism of his attack on the pope, Trump told Corriere that it was she who was "unacceptable".
"She’s unacceptable because she doesn't mind that Iran has a nuclear weapon and would blow up Italy in two minutes if they had the chance."
Referring to her refusal to get involved in the Middle East, he said: "She thinks America should do the job for her, she should not be involved."
Meloni's allies and political opponents were swift to offer support.
"We are and remain staunch supporters of Western unity and steadfast allies of the United States, but this unity is built on mutual loyalty, respect, and honesty," Foreign Minister Tajani said on X.
He said that until now, Trump considered Meloni a courageous person, and "he was not mistaken, but she is a woman who never shies away from saying what she thinks".
"And on Pope Leo XIV she said exactly what all of us Italians think. The prime minister and the government defend and will always defend only and solely the interests of Italy," he said.
By AFP's Dario Thuburn
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