After months of seemingly fruitless effort, the Obama administration suddenly appears to have made progress both on improving Russian-American relations and on resolving the Iranian nuclear issue. After the Obama administration announced that it would not implement the Bush administration’s plan to deploy ballistic missile defenses in Poland and the Czech Republic aimed at protecting Europe from Iranian missiles—a plan strenuously opposed by Moscow—Russian President Medvedev recently suggested that Moscow might go along with tougher sanctions on Iran for not cooperating with the International Atomic Energy Agency (IAEA) and the UN Security Council on its nuclear program.

Further, at the P-5+1 talks with Iran in Geneva, Tehran has agreed to send “most” of the uranium that it has enriched to Russia in order to be converted into “desperately needed material for a medical research reactor in Tehran” (so reported the Washington Post). There have even been reports that Washington and Moscow are pushing Israel to cooperate with the IAEA, sign the Non-Proliferation Treaty (NPT), and give up its nuclear arsenal in order to create a Middle East nuclear-free zone that Iran would agree to be part of.

There may be far less here, though, than meets the eye. Instead of the advent of Russian and Iranian cooperation with the United States, what we may be witnessing instead is a limited convergence of Russian-American interests along with Iran making a show of cooperating with both Washington and Moscow in order to divide them.

Some in the West see Moscow’s willingness to consider increased sanctions against Iran now as a concession to Washington in return for canceling the BMD deployment plan for Poland and the Czech Republic. The Russian press, though, has claimed that Moscow’s agreement to allow the United States to transport lethal materiel to Afghanistan via Russian airspace was the Kremlin’s reward to Obama for canceling the East European BMD deployments, and that Russia is not altering its policy toward Iran at America’s behest.

Moscow would prefer that Tehran not acquire nuclear weapons, and could hardly ignore the American announcement that Iran has another enrichment facility in the vicinity of Qom that it had not declared to the IAEA (as it is bound to do). Moscow’s willingness to convert Iran’s enriched uranium, though, is not a break with past Russian policy. Indeed, Vladimir Putin has for several years offered to resolve the Iranian nuclear issue through Russia providing all the uranium enrichment services that Iran needs for an atomic energy program (performing the enrichment through a “joint venture” either in Russia, Iran, or possibly somewhere else). If both America and Iran accepted this proposal, Russia’s importance to both would be greatly enhanced: America would be reliant upon Russia to make sure Iran did not acquire weapons-grade uranium, and Iran would be dependent on Russia for restraining America vis-a-vis Tehran.

But while the Bush administration appeared willing to accept such a solution in the past, Tehran always responded that while it was willing to acquire some enriched uranium from Russia, it also insisted on enriching some of its own—which is exactly what is unacceptable to Washington and others. It was partly Putin’s frustration with Tehran for not fully adopting his solution to the nuclear issue that appears to have triggered Russian support for previous UN Security Council sanctions against Iran.

Of course, when Moscow did vote in favor of sanctions, the Iranian press denounced Russia in the bitterest terms for—once again—being willing to betray Iran in order to curry favor with America. Russian officials and commentators would then attempt to appease Tehran by claiming that Moscow had actually helped Iran by watering down the much harsher penalties that America and Britain had wanted to impose on it.

Something similar could occur this time as well. Tehran’s uncertainty about whether Moscow really might seriously cooperate with America in imposing harsher Security Council sanctions against it this time may well have motivated Iran to let Russia convert “most” (but not all) of its enriched uranium, in the expectation that Moscow will point to this “increased” Iranian cooperation as reason to delay imposing new sanctions against Tehran as well as watering down those already in place. Unlike the United States, which does not do much business with Iran, Russia has important economic stakes there, which it hopes to increase. While Moscow doesn’t want Tehran to acquire nuclear weapons, it doesn’t want to impose sanctions that would damage Russian economic interests in Iran either. What Russia wants, then, is to cooperate just enough with the United States to convince Washington that it is working with it responsibly (and perhaps obtain some concession for doing so) while at the same time preserving its important relationship with Iran.

And as for Russia encouraging Israel to cooperate with the IAEA, sign the NPT, and give up its nuclear weapons: Moscow could hardly do otherwise at a time when the Obama administration has intensified the longstanding U.S. call for Israel to do all these things. But perhaps unlike some in the Obama administration, Moscow knows full well that Israel is highly unlikely to dismantle its nuclear arsenal. Israel’s position, then, allows Moscow to argue that Iran cannot be expected to make progress on nuclear disarmament unless Israel does. Israel’s likely refusal to do so, then, is a convenient excuse for Moscow not to seriously join with the United States to push Iran on this.

The Obama administration is trying to get Iran, Russia, and Israel to all change their policies. But while Iran, Russia, and Israel do not like one another’s policies, none of them is willing to change its own. Because of the way that these three governments interact with one another as well as with the United States, it is highly likely that Iran, Russia, and Israel will each continue to pursue its preferred policies and thus frustrate the Obama administration’s efforts to get them to change them. Despite press reports to the contrary, then, Russian-American relations—insofar as the Iranian nuclear issue is concerned—are not likely to improve, and the Iranian nuclear issue is not likely to be resolved as a result of the Obama administration’s current diplomatic initiatives.

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Saudi Prince Turki al-Faisal, former ambassador to the United States, has a suggestion for America: drop this nonsense called energy independence. In a strongly-worded essay in Foreign Policy magazine, which coincides with the 150th anniversary of Edwin Drake’s discovery of oil in the United States, Turki lambastes American politicians for invoking energy independence, which “is now as essential as baby-kissing,” accusing them of “demagoguery.” For him, energy independence is “political posturing at its worst—a concept that is unrealistic, misguided, and ultimately harmful to energy-producing and consuming countries alike.” “Like it or not,” Turki concludes, “the fates of the United States and Saudi Arabia are connected and will remain so for decades to come.” (He said much the same in this clip from last May; if you don’t see it, click here.)

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We’ve heard these lines before each time the United States made progress toward lessening its dependence on oil. In February, for example, Ali al-Naimi, the Saudi oil minister, warned of a “nightmare scenario” if consuming countries made progress in the development of alternative fuels. A decade ago, his predecessor, Sheikh Ahmed Zaki Yamani, called technology “the real enemy for OPEC.” This is understandable. After all, no pusher wants to see his client circling around a rehab clinic. For Saudi Arabia, a world where oil plays a marginal role is the nightmarish materialization of the Saudi saying, “My father rode a camel, I drive a car, my son flies a jet plane, his son will ride a camel.”

More troubling is the parade of prominent Americans who deride the notion of energy independence, viewing it as jingoistic, unsophisticated, naive and misleading. One cannot doubt the patriotism of former CIA director John Deutch, who said “energy independence is not a constructive idea,” or former secretary of defense and energy James Schlesinger, who called it a “forlorn hope,” or Pulitzer Prize winner Daniel Yergin who referred to it as “pipe dream,” or Andy Grove, former chairman of Intel, who called the concept “a faulty goal,” or even the members of the Council on Foreign Relations energy security task force who went so far as to accuse those promoting energy independence of “doing the nation a disservice.” But just like Prince Turki, all of those distinguished Americans misunderstand what energy independence really is. As a result, they underestimate our ability to get there.

Contrary to popular conception, energy independence does not mean self-sufficiency. It doesn’t mean not importing any oil or walling ourselves off from the global market. Energy independence is not a function of the amount of oil we consume or import. Rather, energy independence means turning oil from a strategic commodity second to none—one that underlies the global economy and determines the course of world affairs—into just another commodity to trade.

Oil’s strategic status stems from its virtual monopoly over fuel for transportation, which in turn underlies our entire way of life. Worldwide, 95 percent of our transportation energy is petroleum-based. Our cars, trucks planes and ships can run on nothing but petroleum. This is why the much-touted policies that aim to either increase oil supply through domestic drilling or decrease its use by boosting fuel efficiency, while helpful, are insufficient as they do not address the factor that gives oil its strategic status: the petroleum-only vehicle.

Energy independence thus requires breaking the virtual monopoly of oil over transportation fuels, and this can only be done via competition in the transportation fuel sector. (Think about our electricity sector, where a variety of competing energy sources—coal, natural gas, nuclear, solar and wind—can contribute to the grid.) If our cars and trucks were able to run on other fuels in addition to those refined from petroleum, Saudi Arabia’s oil would have to compete over the drivers’ wallet against utility companies, alternative liquid fuels producers and natural gas suppliers. But as long as our cars are gasoline-only, oil remains the only game in town, which is exactly what Saudi Arabia wants.

A few types of vehicle technologies allow us to break oil’s monopoly. The first, and most affordable, is the flex-fuel vehicle that can run on any combination of gasoline and alcohol (alcohol does not mean just ethanol, and ethanol does not mean just corn). It costs an extra $100 per new car to make a regular car flex-fuel. All it takes is a fuel sensor and a corrosion-resistant fuel line. An Open Fuel Standard ensuring that every new car sold in the United States be flex-fuel would not only give rise to an industry of alternative fuels and the associated refueling infrastructure, but it would also drive foreign automakers to add fuel flexibility to all of their models, effectively making it an international standard.

Electricity is another transportation fuel that can compete against oil. It is cheap, largely clean, domestically produced and can be made from multiple sources. Its refueling infrastructure is widely available. All that is needed for an electric car to connect to the grid is an extension cord. Most automakers have already committed to produce models of limited-range pure electric vehicles (EV) or plug-in hybrid electric vehicles (PHEV). The latter allow drivers to travel on stored electric power for the first 20-40 miles, after which the car keeps running on the liquid fuel in the tank, providing the standard 200-400 mile range. For the 50 percent of Americans who drive 25 miles per day or less, shifting from barrels to electrons would make the visit to the local gas station a rarity. If all of those Americans owned PHEVs, a population the size of New York, Florida and Pennsylvania combined would be off oil most days of the year. A PHEV would normally drive 100-150 miles per gallon of gasoline. If it is also made as flex-fuel and fueled with a blend of 80 percent alcohol and 20 percent gasoline, oil economy could reach over 500 miles per gallon of gasoline.

These technologies are either at or few years away from commercialization. If we only understood energy independence properly and took the relevant measures to open the transportation fuel market to competition, oil would be far less central to the world economy than it is today. If we ensure that new cars are platforms on which fuels can compete rather than perpetuate the petroleum standard, then Prince Turki’s descendants, on the 200th anniversary of Drake’s discovery, will be more likely to ride camels than private jets. No wonder he wants us to think otherwise.

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In his June 2009 Bar-Ilan University speech, Israeli Prime Minister Binyamin Netanyahu asserted that Palestinian recognition of Israel as a “Jewish state” was one of Israel’s requirements for agreeing to the establishment of a Palestinian state. Both Palestinian leader Mahmoud Abbas and chief Palestinian negotiator Saeb Erekat,immediately rejected the requirement. However, if there is to be a long-lasting peace between Israel and a Palestinian state, Palestinian recognition of Israel as a Jewish state is a necessity.

Palestinians have three official objections to Israel being recognized as a Jewish state, as well as a fourth objection about which they do not speak openly, but which lies at the heart of the Israeli-Palestinian conflict. The three official objections are as follows:

1. It is not the task of the Palestinians to determine the nature of the Israeli state, but that of the Israelis.
2. Palestinian recognition of Israel as a Jewish state would jeopardize the position of the Israeli Arabs, who form 20 percent of the Israeli population.
3. Israel did not demand recognition as a “Jewish state” in its peace treaties with Egypt and Jordan.

The fourth Palestinian objection—which they do not assert openly lest it destroy the chances for a peace treaty with Israel—is that many Palestinians simply do not accept the legitimacy of Jewish nationalism (Zionism). For the Palestinians, and for many other Arabs as well, a Jew is defined by religion, not nationality or ethnicity, and given the position of Jews as dhimmis, or second-class religious subjects in Muslim history, the Palestinians feel that Jews have no right to be rulers, let alone rule over what they consider Muslim territory.

These attitudes, partially latent during the heyday of the Oslo peace process (1993-2000), were reinforced by the Al-Aqsa Intifada, which transformed what had been a conflict between two peoples over the same piece of territory into a religious war between Muslims and Jews, and which greatly strengthened Hamas in the process. Indeed both Hamas and non-Hamas religious leaders stressed that the Palestinians were fighting the Jews, just as Muhammad had fought the Jews who they allied with his enemies as he sought to unite the Arabian Peninsula under the banner of Islam.

What the Palestinians—and other Arabs—fail to understand is that Zionism arose as a national movement among Jews in Europe in the 19th century. Very much influenced by the national unification movements of Germany and Italy (as were the Arab nationalists of the time), as well as by the increasingly precarious position of the Jews in Eastern Europe who were beset by pogroms in Czarist Russia, Zionist thinkers such as Hess, Lilienblum and Herzl asserted that just as the French had France, the Germans had Germany and the Italians had Italy, the Jews deserved a state of their own where they could lead a “normal, national life,” and the ancient Jewish homeland of Israel, then occupied by the Ottoman Empire, was chosen as the site of the future Jewish state. To be sure, the land which the Zionists wanted was already populated by Arabs; however, the Arabs who lived there at the end of the 19th century had not yet developed a national identity (that was come during the British mandate of 1922-48), and at the time primary saw themselves as Muslims or Christians, or as “Southern Syrians” or as Ottoman subjects.

This being the case, one can respond to the Palestinian reasons for not recognizing Israel as a “Jewish state” in the following manner:

1. While the Israelis alone can and should define the nature of their state, as the existential nature of the state is a central factor in the conflict (unlike, for example, the conflicts between France and Germany in the 19th and 20th centuries), then Palestinian recognition of Israel as a Jewish State becomes central to ending the conflict.
2. There are many minorities in the Middle East, and the often negative treatment of these minorities, whether religious (such as the Copts in Egypt and the Shi’a in Saudi Arabia) or national (such as the Kurds in Turkey and the Azeris) is, in fact, linked to the nature of the country in which they live. However these minorities could be protected by treaty arrangements (currently they are not, although Turkey has begun the process of trying to address its Kurds’ aspirations)—so long as they swear allegiance to the state. Indeed, should a Palestinian state which recognizes Israel as a “Jewish state” emerge, that could make it easier for Israeli Arabs to solve their own identity problems, which have become increasingly serious in recent years, as some Israeli Arab leaders have openly backed Hamas, Hezbollah and Syria in their conflicts with Israel. Thus, as part of a peace treaty between a Palestinian state and Israel, the protection of the rights, albeit not the national rights, of the Israeli Arabs could be stipulated.
3. While acknowledgment of Israel as a Jewish state was not a component of Israel’s peace treaties with either Egypt or Jordan, in neither case was Israel involved in the type of existential conflict with these countries as it currently is with the Palestinians—a conflict in which it often appears that the assertion of one people’s national aspirations negates those of the other people. Thus it is necessary for both sides to recognize the legitimacy of the other’s national aspirations. For the Palestinian side, this involves recognizing Israel as a Jewish State.
4. Finally, and perhaps most important of all, it is necessary for the Palestinians to recognize Israel as a Jewish state to replace the image of the Jew as dhimmi, or second class citizen, with the image of the Jew as a member of a national group exercising legitimate national rights, just as the Palestinians themselves do. Once this is done, the chances for a long-lasting peace between Israel and a Palestinian state will be greatly enhanced.

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On the two major Middle East issues that divide Russia and the United States and that could have been talked about at the U.S.-Russian summit—Moscow’s legitimization of Hamas by regularly inviting its delegations to Moscow, and Russia’s protection of Iran from serious UN Security Council sanctions—not much appears to have been accomplished. I have seen no references to Hamas, and as far as Iran is concerned, all that Obama was willing to say publicly was the following:

Ultimately, you know, we’re going to have to see whether a country like Russia, for example, is willing to work with us to apply pressure on Iran. That’s not something we’re going to know the results of, probably for several more months, as we do the basic diplomatic work of putting this coalition together.

A Russian source, Yury Ushakov, an aide to Putin, told Interfax: “Obama said emphatically that Russia and the United States could cooperate more intensively on Iran, that Russia’s role is extremely important there, and that America is interested in stronger cooperation.”

What Ushakov’s comment may imply is that if Obama were to give Moscow a freer hand in Georgia and Ukraine, Russia might be more willing to be more cooperative on Iran. I doubt Obama is willing to make that bargain.

One of the joys of traveling in the Middle East is the possibility that one can be on the spot to observe the reactions of the residents of the region to important events as they actually happen, instead of being dependent on newspaper or television reporting of the reactions. Thus, I was fortunate to be in Israel as U.S. President Barak Obama gave his speech on U.S. relations with the Muslim world, and in Egypt when Israeli Prime Minister Binyamin Netanyahu gave his speech on achieving an Arab-Israeli peace settlement. While each speech was aimed at multiple constituencies, there might be just enough overlap between them to jump-start the stalled Arab-Israeli peace process.

President Obama’s speech on U.S. relations with the Muslim world had a major impact, both in Israel and in the Arab world. It is clear that the main goal of Obama’s speech was to turn a new page in U.S.-Muslim and particularly U.S.-Arab relations, and if the reactions of the individuals whom I interviewed in Egypt (in Cairo and Alexandria) are any indication, his words were greeted with great enthusiasm, as he went out of his way to demonstrate respect for Islam.

However, despite the assertions of some right-wing Israeli and American commentators, Obama did not pander to his Muslim audience. He emphasized the need to combat Islamic violence, to stop stereotyping both the United States and Israel, and to accept the Holocaust as a fact. While he also emphasized the need to allow greater roles for women in Muslim society and for democracy—in this he did not go as far as some of my interviewees had hoped—overall his speech was very well received.

As far as Israel was concerned, Obama reiterated the U.S. commitment to Israeli security, but he also made very clear that Israel’s responsibility in moving the peace process forward included accepting a two-state solution to the Israeli-Palestinian conflict and stopping the construction of settlements. That Obama’s words were clearly understood in Israel became apparent not only in Netanyahu’s concession on a two-state solution, but also in the words of a security guard whom I interviewed at the West Bank settlement outpost of Kedar Bet (near Maaleh Adumim). When I asked him if Kedar Bet would grow across the valley to meet the already established settlement of Kedar (this is a frequent pattern for settlement growth), he replied: “It all depends on the President of the United States.”

As the security guard’s words indicated, a second audience of Obama’s words was the Israeli body politic. However, in measuring the impact of Obama’s speech on Israel, one must take into consideration the shift to the right of the Israeli public over the past few years, which was reflected in major gains for right-wing parties, and especially Likud, in the election of last February 10 which brought Netanyahu to power as the head of a right-of-center coalition. Essentially, many Israelis, having experienced unilateral withdrawals from Southern Lebanon (2000) and Gaza (2005), which instead of bringing peace brought barrages of Hezbollah and Hamas rockets, were quite sympathetic to Netanyahu’s election position which opposed withdrawals from the West Bank. Such withdrawals, he argued, would result in Hamas rocket attacks against Tel Aviv and Ben-Gurion airport. Thus Obama’s call for a two-state solution to the Israeli-Palestinian conflict had a negative resonance for many in the center and right of the Israeli political spectrum, and a June 19 poll in the right -of-center Jerusalem Post found that 50 percent of Israelis now considered Obama to be more pro-Palestinian than pro-Israeli. (Only 6 percent considered him to be more pro-Israeli, while 36 percent said his policies were neutral and 8 percent did not comment.)

Nonetheless, despite support from a significant part of the Israeli public for his hard-line policies, Netanyahu could not simply ignore Obama’s speech. Israel is dependent on the United States for $3 billion in annual military aid, for protection in the United Nations against the numerous anti-Israeli resolutions introduced by Israel’s enemies, and, above all, for U.S. support for an Israeli attack on Iranian nuclear installations, if the Israeli government deems it necessary—a possibility now somewhat more likely following the Iranian regime’s brutal crackdown on demonstrators after the disputed June 12 Iranian presidential elections.

Consequently, Netanyahu adopted what might be termed a “minimax” strategy: doing the minimum necessary to satisfy the United States—agreeing to a two-state solution, albeit with reservations—while retaining the maximum support in his coalition government. Thus, Netanyahu’s speech was a careful balancing act between the United States and the center-right portions of his coalition government, and the Israeli prime minister’s speech, consequently, precipitated multiple reactions. It was welcomed both by coalition member Labor—the leftist element of Netanyahu’s government—and also by the main opposition party, Kadimah, which may now, at least in part (the faction led by Shaul Mofaz), be prepared to join the coalition. Rightist elements of Netanyahu’s own Likud Party were more reserved in their support, although he sought to win them over with his positions that any Palestinian state would have to be demilitarized, that Jerusalem would remain united under Israeli rule, that no Palestinian refugees could be resettled in Israel, and that Israeli settlers, whom he described as “an integral part of our people, a principled, pioneering and Zionist public” had to be allowed to live “normal lives.”

These positions, together with Netanyahu’s call for the Palestinians to recognize Israel as “the state of the Jewish people,” succeeded in neutralizing, at least in the short run, much of the opposition in his coalition government. Indeed, Netanyahu’s approval ratings shot up after his speech. On the far right of the Israeli political spectrum, however, there were strong protests against Netanyahu’s speech, both by a coalition member, the Jewish Home Party, and by the opposition National Union Party, as well as by some settler leaders such as Rabbi Dov Lior.

Obama, for his part, appeared willing to accept the “half a loaf” which Netanyahu offered—acquiescence in the establishment of a Palestinian State—and, at least initially, appeared to disregard the other elements in Netanyahu’s speech, including his rather vague call for “normal life” for the settlers. Indeed, Obama called Netanyahu’s speech “an important step forward.” By contrast, The response in the Arab world to Netanyahu’s speech was almost universally negative, except for a few commentators writing in Al-Ahram and the Egyptian Gazette, who saw the possibility of building on Netanyahu’s commitment to a two state solution.

The Palestinian leadership on the West Bank, in what I think was a major tactical error, totally rejected the speech which it claimed offered no hope for moving the peace process forward. The lines of the Arab critique of Netanyahu’s speech were as follows: 1) a Palestinian state’s sovereignty would be limited by demilitarization; 2) no Arab could accept Jewish sovereignty over East Jerusalem, including the Dome of the Rock and the Al-Aqsa Mosque; and 3) Israel was evading its responsibility for the 1948 Palestinian exodus by claiming no Palestinian refugees could be resettled in Israel. Most of all, the Arabs seemed angered by Netanyahu’s demand that Israel be recognized as a Jewish state. noting that such a recognition (they claimed) would make them Zionists and would also jeopardize the position of the Israeli Arabs in Israel.

Given the contrasting views on Netanyahu’s speech, is there any hope for moving the peace process forward? The answer is a qualified “yes,” but it is highly dependent on the actions of Palestinian leader Mahmoud Abbas, who, unfortunately, is not a strong leader. If the July talks in Cairo to set up a national unity government between Hamas and Fatah fail—as many such unity talks have failed in the past—and if Abbas comes to the belated realization that the United States won’t simply “deliver” Israel, as Abbas may have naively thought after his visit to Washington in late May and the Obama speech in Cairo, then Abbas may agree to resume negotiations, building on the two-state solution which Obama pressured Netanyahu to accept. Given the fact that Palestinian elections, both for the Legislative Council and for the Palestinian Executive, are due in January 2010, Abbas may wish to demonstrate some progress in his talks with Netanyahu before the elections.

Netanyahu, for his part, has already made some gestures to Abbas by removing a number of roadblocks and check points on the West Bank to make travel in the region easier, and by agreeing to halt, on a trial basis, Israeli raids into a number of West Bank cities, thus enhancing both the role and the prestige of Palestinian police units. Whether Abbas will be willing to resume talks remains to be seen, and it may well be that Obama, who so far has primarily prodded the Israelis, may find it necessary to pressure Abbas into resuming peace talks.

As Israeli Prime Minister Binyamin (Bibi) Netanyahu prepares to meet U.S. President Barack Obama on Monday, there are a number of issues on the table for discussion, including questions about Netanyahu’s willingness to accept a two-state solution to the Israeli-Palestinian conflict, Israel’s building of settlements and settlement outposts on the West Bank, and, of course, what to do about Iran. In addition, there is the question of rapport between the two leaders, one on the right wing of the political spectrum and the other on the left wing. Depending on how the meeting goes, the future of U.S-Israeli relations and the future of the Arab-Israeli peace process could be significantly affected.

To be sure, Obama has made a number of gestures to Israel and to the American Jewish community to set a positive tone for the meeting. Thus the United States refused to participate in the Durban II anti-racism conference because it appeared to be taking an anti-Israeli position. This decision involved some political cost to Obama because the Congressional Black Caucus was pushing for the United States to participate. In addition, The U.S. Justice Department dropped its four year old case against two ex-AIPAC staffers, Keith Weissman and Steven Rosen, who had been accused in 2005 on the very vague charge that they had conspired to disclose national defense information to those not authorized to receive it. The fact that the case was dropped on the eve of the annual AIPAC conference in Washington could only be seen as another gesture to Israel and to the American Jewish community.

While these gestures were important, the fact remains that Netanyahu is a right-of-center Israeli politician and Obama is a left-of-center American one, and there is a real question as to how they will get along. Gone are the warm personal relations between the conservative politicians George W. Bush and Ariel Sharon, and between the slightly left-of-center politicians Bill Clinton and Yitzhak Rabin. Indeed, Netanyahu faced a similar problem when he was prime minister from 1996 to 1999, when he had to deal with Clinton. Fortunately for Netanyahu at that time, he had the support of the Republican-dominated U.S. Congress, and for most of the Netanyahu period, Clinton was bogged down with the Monica Lewinsky affair. Netanyahu has no such cover this time. Obama is a very popular president with a strong Democratic Party majority in both houses of Congress, so Netanyahu’s room for maneuver is much more limited. The most Netanyahu can hope for, if he chooses to stonewall on the peace process, is that Obama will be so bogged down with the problems of the U.S. economy and the rapidly deteriorating situation in Afghanistan and Pakistan, that he will have little time to devote to the Middle East peace process.

These are the issues on the table for discussion:

1. The two-state solution to the Israel-Palestinian conflict. Obama has been pushing hard for Israel to accept the two-state solution, as has his special envoy to the Middle East George Mitchell. Vice-President Joe Biden, in comments to the AIPAC meeting stated, “Israel has to work for a two-state solution…. The status quo of the last decade has not served the interests of either the United States or Israel very well.” So far, Netanyahu has been non-committal, and with his government’s review of the peace process presumably now completed, it will be interesting to see how he responds to Obama’s pressure. Up until now, Netanyahu has been arguing that with Hamas controlling Gaza and a weak and corrupt Mahmud Abbas running the West Bank, the time is not right for the creation of a Palestinian state.

2. Settlements and settlement outposts. Obama, as many U.S. presidents before him, is strongly opposed to the expansion of settlements and the construction of settlement outposts (often more than a kilometer away from the original settlement), arguing that the expansion of the settlements takes away land that the Palestinians want for their state, and causes despair among the Palestinians. As Biden told AIPAC, “You’re not going to like me saying this, but don’t build more settlements, dismantle existing (settlement) outposts and allow Palestinians freedom of movement.” What is at issue currently is the so-called E-1 corridor between Maaleh Adumim and Jerusalem which would cut the West Bank virtually in half. Whether Obama will be willing to press Netanyahu on this will be an early test of their relationship.

3. Iran. This is perhaps the most difficult of the issues which the two leaders will face. Obama has been trying to use diplomacy to get the Iranian leadership to cease enriching uranium and answer IAEA (International Atomic Energy Agency) questions about their nuclear weaponization program. For their part, the Israelis claim that the Iranian leaders are stalling, and will continue to string out the United States in the talks until their nuclear weaponization program is completed. It will be interesting to note whether Obama and Netanyahu will agree on a deadline for Iran to comply with US wishes.

A related question is the nuclear non-proliferation treaty. Some in the Obama administration have been pressing Israel to sign the agreement so as to have its nuclear facilities inspected. The idea here seems to be that were Israel to sign, Iran would have one less excuse for its stalling. The problem from the Israeli perspective is that until Israel is at peace with all of its neighbors, including Iran, Israel needs its nuclear program as a deterrent against those countries, and especially Iran, that have sworn to destroy it.

Finally, in relation to Iran there is the question of timing. Netanyahu has been pushing for an Iran-first policy, arguing that if the Iranian nuclear program can be halted, that would weaken Hamas and Hezbollah, which are enemies of both Israel and the peace process. The Obama administration has countered that if there were a genuine Israeli-Palestinian peace process underway, it would weaken the appeal of Iran to the Sunni “Arab street,” and thus facilitate the peace process.

4. The Arab Peace Plan. The Obama administration has been praising parts of the Arab Peace Plan, which basically calls for Arab state recognition of Israel in return for Israel’s withdrawal to its pre-1967 war boundaries and a “just” settlement of the Palestinian refugee problem. The Israelis object not only to a complete withdrawal, which would conflict with Israel’s need for “secure borders” as noted in UN Resolution 242, but also to the Arab interpretation of the solution to the Palestinian refugee problem, which involves the return of the refugees to Israel, not to a Palestinian state on the West Bank and Gaza. The Obama adminstration has been pushing the Arabs to agree to aspects of normalization before a full Israeli withdrawal, but the Arab world is split on this, with Jordan favoring the U.S. idea and Syria opposing it.

5. Arab recognition of Israel as a “Jewish state.” While Netanyahu has agreed not to push for this as a prerequisite for negotiations to begin, he wants it as part of a final agreement. The Arabs, citing the 20-percent non-Jewish Arab minority in Israel, oppose it. To Netanyahu, this is a case of Israel’s legitimacy as a Jewish state and Israel’s acceptance in the Middle East, so it will be interesting to see if the United States is willing to expend any political capital to try to bring the Arabs around to the Israeli position on this.

6. U.S. aid to a Palestinian national unity government that includes Hamas representatives. Netanyahu has been opposing such aid because it would serve to legitimize Hamas, even as the organization continues to refuse to recognize Israel and calls for Israel’s destruction. The United States has gone back and forth on this issue, and Congressional pressure has limited Obama’s flexibility on it. While at the present time this is just an academic question because Hamas and Fatah are far from forming a unity government, the issue may well come up in the Obama-Netanyahu negotiations.

In sum, Obama and Netanyahu will have lots to talk about when they meet on Monday. Whether anything substantive will emerge from the discussions, or whether the two sides will decide just to set up negotiating teams to deal with these six issues, remains to be seen.

The latest contribution to Middle East Papers is by Robert O. Freedman, who blogs about Israeli affairs at MESH. As Iran’s nuclear drive continues unimpeded, and the Obama administration pursues a policy of “engagement,” Israel approaches a moment of decision. Freedman explains why diplomacy and sanctions are unlikely to succeed, and considers plausible scenarios of an Israeli resort to military action against Iran’s nuclear facilities. Download here.

As Binyamin Netanyahu takes over as Israel’s new prime minister, the key to the future of his government may well be Avigdor Lieberman, the leader of the predominantly Russian-immigrant-based Yisrael Beiteinu Party, who was selected by Netanyahu as his foreign minister.

There are two major challenges which Lieberman poses to the Netanyahu government. The first is the question of how strongly he will pursue the secularist themes that permeated his campaign. Pushing that agenda could lead either his party, or Shas, with which it has been in conflict over religious issues, to leave the government. The second issue is Lieberman’s call for a transfer of territory inhabited by those Israeli Arabs who won’t pledge loyalty to Israel, to a new Palestinian state, in return for Israel maintaining some of the Jewish settlements on the West Bank.

Israel had a Russian-based political party before Yisrael Beiteinu. That was the Yisrael Ba’Aliyah party of Natan Sharansky. After initially securing seven seats in the 1996 election, Sharansky’s party fell to two seats in 2003 and then merged with Likud. Sharansky’s biggest mistake, and the primary cause of the demise of Yisrael Ba’Aliyah, was his neglect of the interests of the Russian sector of Israel’s population, as he went on to pursue a career in national politics.

So far, at least, Lieberman has not made this mistake. Issues of conversion and civil marriage are central to Israel’s Russian immigrant community. A reported 300,000 of the one million Russians in Israel are not Jewish according to Jewish law, and Lieberman put their status at the center of his campaign. Unfortunately for Netanyahu, Shas, another major part of his coalition, is dead set against both civil marriage and easing the conversion process. While the two parties (as Alan Dowty has noted) have temporarily seemed to paper over their dispute through the establishment of a committee, Lieberman might well leave the government if that committee does not come up with a compromise satisfactory to Yisrael Beiteinu. The departure of Lieberman’s 15 seats could cause the Netanyahu coalition government to collapse, unless he attracts Tzipi Livni’s Kadima party, a very unlikely prospect at this time.

Another major difference between Lieberman’s Yisrael Beiteinu party, and Sharansky’s Yisrael Ba’Aliyah party, is that Lieberman has succeeded in making his party more of an Israeli mainstream party. Lieberman’s means of doing this was to exploit the rising anger of many Jewish Israelis toward Israel’s Arab minority.

There are two factors at work here. First, Israeli Arabs justifiably feel resentment against discrimination by the majority Jewish community in terms of government grants to their villages and jobs in the public sector. Little has been done to improve the economic status of Israel’s Arab community, despite the recommendations of a high-level commission set up to investigate the causes of the Arab rioting in October 2000 after the start of the Al-Aqsa Intifada.

On the other hand, the leaders of the Israeli Arab community have increasingly identified with Israel’s enemies, particularly Hamas and Hezbollah, and have written several policy documents that effectively call for the end of the Jewish State. These actions have precipitated increasing anger against the Israeli Arabs—or Palestinian Israelis,as many now wish to define themselves—and have enabled politicians such as Lieberman to capitalize on this anger for electoral purposes. Indeed, it is estimated that one-third of his vote came from non-Russian Israelis angry at the Israeli Arabs.

Lieberman’s plan to deal with the Israeli Arabs, which some commentators both in Israel and abroad have called “racist,” involves giving the Israeli Arabs a choice. Either they can pledge loyalty to Israel as a Jewish State, or they can leave Israel—with their land. What Lieberman suggests is the transfer of Israeli Arab cities like Umm al-Fahm and towns in the Arab triangle in the Galilee, to a new Palestinian state, in return for Israel’s annexation of Jewish settlement areas on the West Bank such as Maaleh Adumim and Gush Etzion. The outspoken Lieberman says aloud what many Jewish Israelis increasingly believe—that it is impossible for Jews and Arabs to live together in a single state.

Whether or not one agrees with Lieberman, there have been cases of population transfers following wars caused by nationality conflicts. Indeed, compared to the expulsion of Germans from Czechoslovakia and Poland after World War Two, or even the exchange of Greeks and Turks in 1923 following the failed Greek invasion of Ottoman Anatolia, Lieberman’s idea is far more gentle. The dilemma, of course, is that the vast majority of Palestinian Israelis don’t want to leave Israel for the chaos and corruption of the West Bank, even with their land. In Israel, their economic status is far better and they can speak freely.

Nonetheless, as tensions rise between Israeli Jews and Palestinian Israelis, the Arabs may soon face a difficult choice. The more they identify with Hamas and Hezbollah—organizations dedicated to the destruction of Israel—the more Lieberman’s ideas will become popular. Assuming Lieberman is not sidetracked by a series of corruption investigations against him, Yisrael Beiteinu may increase in its electoral strength in future elections—something that has to worry not only Israel’s Arab community, but politicians on the right side of Israel’s political spectrum, such as Binyamin Netanyahu.

The Israeli elections, coming just a few weeks after a cease-fire ended the war between Israel and Hamas, appear to have raised more questions than they settled about the Israeli position in the Arab-Israeli peace process.

On the one hand, the extremes of both the Israeli left and the Israeli right both lost ground—the left wing Meretz Party dropped from five to three seats in the 120-member Israeli Knesset, while the right-wing tandem of the National Union and Jewish Home parties (which, unlike the 2006 elections, ran separately) dropped from nine to seven seats.

On the other hand, there was an overall shift from the center-left to center-right on the Israeli political spectrum, due in large part to the failure of the 2005 withdrawal from Gaza to end the rocket fire from Gaza into Israel, and the failure of the brief Israel-Hamas war to end attacks from Gaza. While Kadima, Israel’s centrist party, lost only one seat (from 29 to 28), the left-of-center Labor party dropped six seats, from 19 to 13. At the same time, the right-of-center Likud more than doubled in size from 12 to 27 seats, and the right-of-enter Yisrael Beiteinu party of Avigdor Lieberman increased from 11 to 15 seats.

Likud leader Binyamin Netanyahu, who was asked by Israeli President Shimon Peres to attempt to form a governing coalition, has 21 days left to assemble 61 MKs or more in the coalition. The chances for Israel to move the peace process forward range from limited to virtually non-existent, depending on the type of coalition he forms.

To be sure, there will be no hope for a Palestinian-Israeli peace until Hamas, which currently governs a war-battered Gaza, and Fatah, which rules the West Bank, can reconcile and form a national unity government that has as one of its basic provisions Palestinian recognition of Israel and an agreement to a two-state. While Fatah and Hamas have begun reconciliation talks in Egypt, Hamas will have to make a major change in its political position, and be willing to recognize Israel, for any Israeli leader to give credence to the Palestinian position.

On the Israeli side of the peace process equation, Netanyahu is challenged by the prospect of forming two alternative coalitions, one centrist, and one right-wing. If he forms a centrist coalition—as he claims he wants to do in the face of the existential threat from Iran, the growing world economic crisis which has begun to affect Israel’s economy, and the ongoing challenges of Hamas and Hezbollah—he has three potential partners, all of whom have come out for a two-state solution: Labor, Kadima, and Yisrael Beiteinu (which has been unfairly characterized by some in the media as a far-right party). Netanyahu himself, however, has not yet been willing to come out publicly for a two-state solution, and unless he does so, it is unlikely that either Labor or Kadima will join him. There is, of course, the possibility that Netanyahu will succeed in splitting the Kadima Party by offering major ministries to top Kadima politicians such as Shaul Mofaz and Dalia Itzik. So far, however, they have stayed with Kadima’s leader, Tzipi Livni, in resisting a coalition government until Netanyahu explicitly endorses a two-state position.

Should a centrist coalition not be formed, then Netanyahu faces the prospect of having to form a right-wing coalition consisting of his Likud party (27 seats), Yisrael Beiteinu (15 seats), the two Haredi (ultra-orthodox) parties Shas (11 seats) and United Torah Judaism (5 seats), and the two far-right parties, Jewish Home (3 seats) and National Union (4 seats), for a total of 65 seats.

However, such a coalition will be very problematic for Netanyahu. His first problem will be overcoming the bitter disagreements between the Haredi parties on the one hand and Yisrael Beiteinu on the other. Yisrael Beiteinu leader Avigdor Lieberman’s call for civil marriage and an easing of conversion requirements, something of great importance to his Russian immigrant constituents but anathema to the Haredim, has led Shas leader Rabbi Ovadia Yosef to call Liberman the “Devil” and to state that anyone who voted for Lieberman’s party will have committed an unredeemable sin. Even if Netanyahu manages to make peace between Shas and Yisrael Beiteinu, he faces very serious budgetary demands from the Haredi parties which hope to increase allocations to their specialized institutions, to increase child allowances, and to greatly increase subsidized housing construction. Indeed, Shas alone has asked for $375 million more in allocations. At a time of rising economic constraints, as well as rising demands from the Israeli Defense Ministry to meet the threats from Iran, Hezbollah and Hamas, there is a real question as to where Netanyahu will find the money to meet the Haredi demands.

Yet another challenge Netanyahu faces in forming a right-wing coalition are the demands of the Jewish Home and the National Union parties. Both have demanded an end to the settlement freeze and the legalization of the hitherto illegal Jewish settlement outposts on the West Bank. If Netanyahu accedes to their demands, he will find himself in an open confrontation with Barak Obama, whose special envoy to the Arab-Israeli conflict, former Senator George Mitchell, has made no secret of his opposition to Jewish settlements on the West Bank as a major obstacle to the peace process.

Given these constraints, it is clear that Netanyahu would prefer to have a centrist coalition with Kadima (together they would have 55 seats) and either Yisrael Beitinu or Labor or preferably both to give him a very broad coalition. Indeed, he has just signed a coalition agreement with Yisrael Beiteinu. Whether he would be willing to pay the price for such a coalition with Kadima—explicit support for a two-state solution to the Israel-Palestinian conflict—and possibly a rotational agreement between himself and Tzipi Livni as prime minister (Labor’s Shimon Peres and Likud’s Yitzhak Shamir had such an agreement in the mid-1980s), remains to be seen.

In the week since Israelis went to the polls, the operative word in the media seems to be “inconclusive,” based on the near-tie between the two largest parties and the prospect of bone-wearying bargaining before a government emerges. Both observations are true, but nevertheless the election did register a sharp and significant shift in the Israeli body politic.

Tzipi Livni managed to hold Kadima together and lose only one seat, against expectations, even managing to beat Likud by one seat. For the first time in Israeli political history, a strong centrist party has actually lasted for more than one election; this is a personal achievement of great note and possibly the harbinger of a long-term structural change of major significance. But having said that, the real import of the election was the clear victory of the right.

Only in 2003 have the right and religious parties, as a bloc, achieved such success; in essence, the 2009 election has erased the impact of the 2006 election that followed Ariel Sharon’s defection from Likud and the establishment of Kadima. We are back in 2003, when the second intifada produced the most hawkish Knesset ever. Israel’s turn to the right is a long-term development set in motion by the second intifada, the rise of Hamas as the pivotal Palestinian player, the intrusion of Iran, and what is seen by many Israelis as the failure of unilateral disengagement in Lebanon in 2000 and Gaza in 2005. In this context, the 2006 election was a transitory fluke.

In 2006, center and left parties won 70 seats, while right and religious parties held the remaining 50. Now the center and left are reduced to 55, including 11 seats held by Arab parties, while right and religious parties hold a combined 65. The Jewish left was devastated, dropping from 24 seats to 16, as many of its voters moved rightward to Kadima, replacing voters who moved rightward from that party back to Likud, their original home. Thus Kadima maintained its strength while Likud more than doubled its numbers.

Religious parties considered separately did not actually gain; ultra-orthodox (haredi) parties lost a couple of seats, while the remnant of the old National Religious Party appeared in a new guise as “The Jewish Home” and emerged with only three seats. For the first time in Israel’s history, the religious camp in the Knesset will be dominated almost entirely by the haredim; the national religious camp, long a fixture of the Israeli scene, has practically disappeared.

The other winner on the right, apart from Likud, is Avigdor Lieberman’s Yisrael Beiteinu, which has outgrown its Soviet immigrant base and has managed to attract a growing clientele with its unique mixture of secularism and a new model of hawkishness based more on ethnicity than on territoriality. This is not the old right wing of “Eretz Yisrael Hashlema” (The Entire Land of Israel); Lieberman is ready to reduce the Arab presence in Israel not only by surrendering Arab population centers on the West Bank and Gaza, but even by ceding Arab-inhabited areas of Israel itself.

Israel’s turn to the right does not mean the end of the two-state solution as the dominant model for resolving the Israeli-Palestinian conflict. Apart from Lieberman’s heterodoxy, Likud’s platform neither endorses nor rules out a two-state solution, but simply condemns any further unilateral withdrawals on the model of Lebanon in 2000 or Gaza in 2005. Thus the differences between the parties are less far-reaching than differences that have sometimes existed between parties joined in the same government. Likud leader Binyamin Netanyahu can therefore pursue his announced goal of a National Unity government, knowing that in any event there will not be serious peace negotiations over basic final status issues so long as there as no unified Palestinian negotiator in control of all Palestinian territories and able to implement a final agreement.

For the same reason, the formation of a government dominated by the right, with or without Kadima as a junior partner, will not stir up any untoward clashes with the new U.S. administration. With no serious peace talks in the offing, efforts will focus on stability and conflict management rather than a final resolution. A hawkish Israeli government can still work on strengthening the viability of the West Bank under the Palestinian Authority, and otherwise working toward the day when Hamas can no longer cast an effective veto over an Israeli-Palestinian peace. And in any event, all Israeli parties as well as the United States are likely to be more focused in the near future on the issue of Iran’s nuclear weapons program.

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