Rules of the game for the Middle East can be changed

As we mark one year into the Obama era, several realities have become painfully clear. There are limits to what a US president is willing or able to do. Barack Obama began his term in a rush to advance Israeli-Palestinian peace, which he claimed was in "America's national security interests". One year later and he appears to be no longer in a rush. In recent interviews he has analysed the reasons for the failure to make progress and he pointedly ignored any mention of the issue in his state of the union speech.

What is distressing is that in addressing the other unrealised priorities he set for his first year - health care, reform of the banking industry, the energy sector and climate change - the president has made clear his determination to fight "the lobbyists and special interests" standing in the way of change. There are no indications he'll extend this same fighting spirit to Middle East peace. His team, headed by George Mitchell, will continue to work in the field. But for now, with a sluggish economy, staggeringly high unemployment and congressional elections in November, Mr Obama will direct his energies towards issues uppermost in the minds of voters.

Both the Israeli and Palestinian political situations have become seriously dysfunctional. Mr Obama has alluded to this in recent interviews and at a town hall session in Florida last week. The problem is even more significant than the president suggested. Israeli hardliners and fanatic settlers pose a serious threat not only to Palestinians, but to any Israeli government that tries to uproot West Bank settlements. They are a civil war in the making and the danger they pose must be recognised and confronted. While Israel has at times made a show of taking them on in a limited way, I fear that no coalition Israeli government is ready to wage the fight needed to defeat these elements. Meanwhile, the prime minister Benjamin Netanyahu feels that he has successfully "gamed" the US administration and has been emboldened by his "victories".

On the Palestinian side, the situation can only be described as distressed. The Palestinian Authority's leadership, already weakened by their loss in 2006 elections and their deep internal division, has been further hurt by the US. After getting them to walk out on a limb by standing behind a settlement freeze and pressuring them on the Goldstone Report, the US abandoned them in the end. And despite the disasters which Hamas's failed leadership has helped to bring upon their people, they don't appear ready to change direction any time soon.

Finally, there is the demonstrated weakness of the Arab states to use their collective strength to launch any game-changing diplomatic initiative. Arabs should not have waited, as they did, for Mr Obama to take office. The period between the 2008 election and the inauguration provided an excellent opportunity to put forward an Arab initiative which would have forced the new president to respond. Instead, it was Israel that attempted to greet the incoming administration with what they hoped would be their own game-changing war, the disastrous attempt to eliminate Hamas. And when, at the beginning of his term, Mr Obama challenged the Israelis, Palestinians and the Arab states to make confidence-building gestures to create an improved environment for peacemaking, once again the Arabs had the opportunity to advance their own proposals. And once again, they did not.

And so here we are, one year gone, the wind is out of the president's sails, the situation on the ground is more troubled and complicated, and the Israelis, though facing some international pressure, are feeling that they have regained the upper hand in the US. What can be done? The answer to this question is, most certainly, not to wait for "magic" from Mssrs Obama or Mitchell. There are concrete steps Arabs can take during this period. First and foremost on the agenda should be to follow the Saudi lead to achieve a broader Arab consensus. That would help to restore some degree of Palestinian unity, pressing them to rebuild their house and support institution-building efforts, like that laid down by the Palestinian Authority prime minister Salam Fayyad.

It is also important for the Palestinians to lay out an agenda for confronting the occupation and activating and mobilising their base in non-violent direct action. Recent demonstrations in Sheikh Jarrah against settlement expansion and anti-wall protests demand attention; they can provide the basis for expanded joint Palestinian-Israeli action. Such a programme could help re-energise the Palestinian base, bring the leadership and their constituency into a closer working relationship, and draw international support for Palestinians in future negotiations. If this is augmented by a renewed Arab peace initiative with a strong public relations component, it could provide a constructive game-changer that could pressure both Israel and the US to respond.

James Zogby is president of the Arab American institute