set diffexpr=MyDiff()
function MyDiff()
   let opt = ""
   if &diffopt =~ "icase"
     let opt = opt . "-i "
   endif
   if &diffopt =~ "iwhite"
     let opt = opt . "-b "
   endif
   silent execute "!diff -a --binary " . opt . v:fname_in . " " . v:fname_new .
        \  " > " . v:fname_out
endfunction

set diffopt="icase,iwhite"