Barack Obama’s greatest foreign-policy challenges in his first ten months in office have been in the “the greater middle east” - that wide arc stretching from Palestine and Israel through Iraq and Iran to Pakistan and Afghanistan. The new United States president inherited costly wars on multiple fronts in three of these countries (Iraq and “AfPak”), growing conflict in Somalia, rooted hostility between Israelis and Palestinians, a combative Iran, a worldwide hunt for al-Qaida militants, and endemic anti-US sentiment throughout Muslim lands. To reverse the hostile trends, settle the conflicts and bring American troops home, the Obama foreign-policy team advanced a two-pronged strategy of outreach to the Islamic world and peace-talks between Israelis and Palestinians.

It has already been a turbulent ride, with little as yet in the way of substantial achievement. The long-awaited announcement (on 1 December 2009) of the administration’s new strategy in Afghanistan highlights the gap between promise and performance that must be closed if the foreign-policy aspect of the Obama presidency is to be a success. But in the equally difficult arena of Israeli-Palestinian conflict, there is a real danger that what promise existed has already dissolved.

The path of failure

The evidence is clear. Washington’s pressure has failed to persuade Israeli prime minister Binyamin Netanyahu to agree to a complete settlement-freeze in the West Bank and east Jerusalem; faced with stiff opposition by Israel’s rightwing governing coalition, and Israel’s friends in the United States, the administration retreated. True, Netanyahu himself announced a ten-month halt of new settlement-construction on 25 November 2009, but this made no mention of east Jerusalem where so much of the tension over the issue is concentrated as the areas under settler control expand.

The wounded response of the Palestinian Authority’s president, Mahmoud Abbas, was (on 5 November 2009) to declare his intention to resign, amid charges of “betrayal” by the Americans. In the context of the political divisions among the Palestinians pitting the Islamist movement Hamas against Abbas’s own Fatah party, his withdrawal from the presidency could unravel what remains of the peace process.

The issue of settlements on Palestinian land seized in the 1967 war is key. Barack Obama needs as well as wants an Israeli halt to all settlement-construction, for this is central to any prospective two-state solution. The international community, including the United States, consider that the West Bank and east Jerusalem settlements where about 500,000 Israelis live are a real impediment to a final peace agreement with the 2.5 million Palestinians living there (and their 1.4 million co-nationals in Gaza); the more these settlements spread and become permanent, the less capable the Palestinians are and feel themselves to be of creating a contiguous, viable state.

It may be that Obama, facing pivotal domestic issues such as healthcare reform and unemployment - as well as AfPak and other international priorities - is unwilling to invest more of the precious political capital he had already used to take a tougher line with Netanyahu. In any event, the retreat from what had appeared to be a principled demand for a total freeze to a lesser request that the Israelis only show “restraint” on settlements has had damaging political consequences beyond Mahmoud Abbas’s act of desperation.

The shift was symbolised in the US secretary of state Hillary Clinton’s remarks at a joint news-conference with Binjamin Netanyahu in Jerusalem on 31 October 2009. In describing the prime minister’s offer to curb only some settlement-construction as “unprecedented” in its “specifics”, Clinton also joined Israel’s demand that Abbas return to the negotiating table without preconditions. "I want to see both sides as soon as possible begin negotiations", she added.

Palestine’s rival Hamas and Fatah movements were provoked into a rare moment of unity in opposition to the call to restart peace talks. A written statement from the chief Palestinian negotiator Saeb Erekat said: "If America cannot get Israel to implement a settlement freeze, what chance do the Palestinians have of reaching agreement" with Israel on the even more complex set of issues involved in final peace-talks.

Egypt and Jordan, pro-Washington states and the only Arab countries to have peace agreements with Israel, voiced similar sentiments. Jordan's King Abdullah II travelled to Cairo to consult with Egyptian president, Hosni Mubarak; afterwards, the king’s official account said that both leaders "insisted on the need for an immediate halt of all Israeli unilateral actions, which undermine the chances of achieving peace, especially the settlement construction."

But it was the secretary-general of the Arab League, Amr Moussa, who best conveyed the depth of Arab bitterness and anger over Obama’s change of approach on settlements. He told reporters: “(All) of us, including Saudi Arabia, including Egypt, are deeply disappointed ... with the results, with the fact that Israel can get away with anything without any firm stand that this cannot be done.” When asked if Obama's initiative to restart Israeli-Palestinian peace-talks had failed, he added the ominous words: "I still wait until we have our meetings and decide what we are going to do. But failure is in the atmosphere all over."

The administration sought to contain the furore. Hillary Clinton sought to reassure Arab foreign ministers at a meeting in Morocco that the Obama administration will continue to push Netanyahu to do more, and that her comments in Jerusalem were meant to offer Israel encouragement for moving in the right direction, even if that movement fell short of what the US wanted. She declared: “The Obama administration position on settlements is clear, unequivocal, it has not changed. As the president has said on many occasions, the United States does not accept the legitimacy of continued Israeli settlements.”

The overall effect of the US retreat on the settlements issue has been to corrode the administration’s already fragile authority in the region. The lesson learned by Arabs and Israelis alike is that Obama does not possess the political will to push forward his vision of a two-state solution. His capitulation to Israeli and domestic opposition sends the wrong message to both camps and emboldens the more hardline on each side to resist making the concessions that will be necessary for a breakthrough.

The road not taken

What can be done to repair the damage and restore a sense of movement to the negotiation process? The answer will be shaped in part by what happens inside the Palestinian political community and in the now frayed relationship between Washington and the Arab world.

First, even if Mahmoud Abbas wished to compromise and return to negotiation without preconditions, it would be at his own peril. The already unpopular Palestinian president would risk a revolt from within his ruling Fatah party, as well as a potent challenge from Hamas. The Islamist movement has already stressed that Abbas does not represent the Palestinians as a whole and cannot sign any peace agreement without a public mandate.

In the Palestinian election of January 2006, Hamas won a comfortable parliamentary majority over the previously dominant Fatah. The relations between the two have since been tense, and as the next round of elections scheduled for January 2010 approaches any hint of softening on settlements could further weaken “Abu Mazen” and his Palestinian Authority.

Mahmoud Abbas’s approval-ratings have slightly improved in the past year - in part because of Hamas's military blunders and political recklessness, including over the disastrous Gaza war of December 2008-January 2009. But he was politically crippled by the US after being persuaded to withdraw endorsement of the United Nations report into the war, compiled by Richard Goldstone and published on 15 September 2009, that accused Israel (and Hamas) of war crimes. Abbas backed down amid huge public uproar, and fury from within his own party.

Second, the shift in the United States’s public statements on the vital question of settlements can only have a negative effect on Barack Obama’s outreach to the Muslim world (proclaimed in his speech in Cairo on 4 June 2009) and the attempt to contain Iranian influence in the region. Obama’s first six months in office raised Muslim expectations of a real change in American policy and buoyed Palestinian hopes that he would deliver them their longed-for independent state. These hopes are rapidly fading, and being replaced by disillusion and cynicism. More Arab and Muslim voices can be heard saying that Obama is no different from his predecessors, and that all he offers is empty rhetoric.

This fresh chorus of protest and disappointment must be seen in the context of the promises made and high expectations set by the new president in the period until mid-2009. Then, Obama and his senior advisors repeatedly insisted on a total freeze of all settlement-construction; the president himself stressed that the US does not accept the legitimacy of continued Israeli settlements in occupied Palestinian territories.

Moreover, in his landmark Cairo speech, Obama struck a new tone compared to his predecessors in speaking explicitly and eloquently about the “pain” and “humiliation” of the Palestinians in the pursuit of a homeland. He announced then: “So let there be no doubt: the situation for the Palestinian people is intolerable. And America will not turn our backs on the legitimate Palestinian aspiration for dignity, opportunity, and a state of their own.”

It is hard to exaggerate the importance of the settlement issue to the chances of any progress towards peace between Palestinians and Israelis. Even the leading pro-Washington governments in the Arab world - Egypt, Jordan and Saudi Arabia - have lent their support to the Palestinian position that resuming negotiations is futile without a freeze on settlement-expansion. These states hoped that a revival of the peace process would reduce Iranian clout in the Arab arena and weaken its radical allies closer to home, including Hamas and Lebanon’s Hizbollah.

Barack Obama has been in office less than a year. The Israeli-Palestinian conflict ranks very high among the mounting domestic and foreign-policy problems he faces. If it is not to defeat him as it has so many of his predecessors, the gap between rhetoric and policy must be closed.

---------

Fawaz A. Gerges is a professor of the international relations of the middle east at the London School of Economics and Political Science (LSE). Among his books are America and Political Islam: Clash of Cultures or Clash of Interests? (Cambridge University Press, 1999), Journey of the Jihadist: Inside Muslim Militancy (Harcourt Press, 2006), and The Far Enemy: Why Jihad Went Global (Cambridge University Press, 2005). His website is here