01/28/2011 10:05 am ET | Updated May 25, 2011

Where Is Obama Going With Mideast Peace?

President Obama's State of the Union address paid scant attention to foreign policy in general, but one omission especially raised some eyebrows. The speech did not contain the words "Israel," "Palestine," or "Middle East peace."

It's not as if anyone was expecting anything radically new from the President. But Mideast watchers did anticipate the usual White House boilerplate restating Washington's commitment to a two-state solution with security for both sides.

Two theories rapidly emerged in the region to explain this curious silence: the first posited that Obama did not want to say anything right now because the administration is laying the groundwork for some kind of new initiative; the second speculated that Obama is simply fed up of an issue that seems impossible to solve and is ready to wash his hands of it.

If the first theory has any validity, an early test will come in the form of a Palestinian-sponsored resolution at the U.N. Security Council condemning Israeli settlements and demanding a halt to all construction in territories captured in 1967, including East Jerusalem.

The assumption is that the administration, which has been working behind the scenes to prevent the resolution coming to the floor, would veto it if the Palestinians and their Arab allies insist on pushing it to a vote. The last U.S. president to allow such a resolution to pass was Jimmy Carter in 1980. Allowing himself to be bracketed with Carter might not be the smartest political move for Obama.

The second theory is that the administration believes the peace process has reached a dead end and cannot under current conditions be revived. Obama himself painted the Palestinians into a corner by calling last fall for a total cessation of Israeli settlement activities. Palestinian President Mahmoud Abbas, who had never previously made a settlement freeze a pre-condition for talks, now refuses to negotiate without such a freeze.

The leak of the so-called "Palestinian papers" further weakens the Palestinian peace camp -- even though the reported "concessions" offered by Abbas and his negotiators in past talks hardly seem surprising. Most of these so-called compromises had been widely, if quietly, accepted by Arab governments years ago. Nonetheless, Abbas now finds himself under renewed pressure from Hamas and other extremists to explain himself to a Palestinian public he has made little effort to prepare for the concessions that will have to be part of a two-state solution.

Abbas seems more inclined right now to pursue a different strategy, trying to win international recognition for a Palestinian state based on 1967 borders that would culminate in a unilateral declaration of independence in the fall. Such a strategy could certainly deliver the Palestinians a short term public relations boost - but it cannot deliver a real state with real independence. Only a negotiated solution can do that.

It is indeed difficult to see a way forward for the Obama administration. Still, it should not give up on the negotiations. As veteran Mideast peace negotiator Dennis Ross once observed, pursuing Israel-Palestinian peace is like riding a bicycle -- if you stop peddling, you fall off.

In the past, lack of a peace process -- even one that seems to have been making little progress -- has created a vacuum that extremists in the region have been quick to fill. The collapse of negotiations at Camp David in 2000 was quickly followed by the outbreak of the Second Intifadah, which set back both the Israeli and Palestinian economies by years as well as costing thousands of lives.

In the past few years, the relative calm between Israel and the West Bank, even though it falls far short of true peace, has allowed both sides to flourish. Israeli tourism last year broke all records, the economy grew by 3.9 percent and the country joined the OECD.

Economic growth in the West Bank was a spectacular nine percent, even though it was partly underpinned by an influx of foreign aid dollars. The calm situation, enhanced by effective cooperation between Israeli and Palestinian security forces, has allowed Israel to remove most of its roadblocks in the territory. Palestinian commercial activity is booming. The city of Ramallah looks like a building site, with fancy new hotels, apartments and stores thronged with buyers. However, all this progress is fragile in the absence of a viable peace process and could easily be erased with a resumption of civil unrest and violence.

Looking more widely at the region, one can scarcely count the sources of possible instability. From Egypt to Lebanon, Israel's neighbors seemed gripped by civil strife. The Mubarak government in Egypt is facing its most serious domestic challenge since taking power in 1981. The Obama administration seems content to allow events to play themselves out. It has called on the Egyptian authorities to "implement political, economic and social reforms to respond to the legitimate needs and interests of the Egyptian people." Even if the 82-year-old Mubarak weathers the storm, his plan to pass the reins of government to his son Gamal looks far from certain. And it is unclear whether any other successor government would maintain its peace treaty with Israel, which has been a bulwark of stability in the region.

In Lebanon, Iranian-backed Hezbollah is consolidating its power. The organization has some 40,000 rockets aimed at the Jewish state, including some now capable of hitting Tel Aviv . In Gaza, Hamas and other groups continue firing rockets and mortars at Israel.

Of course, Obama is focused on domestic policy and the economy, the key to his own political fortunes in 2012. But the rest of the world is not going away. Much as he would like to disregard the Middle East, he cannot do so.

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