AS THE end of 2011 approached, the Obama administration appeared positioned to have presided over three definitive foreign-policy outcomes in the broader Middle East for which it could claim substantial credit. The death of Osama bin Laden, while not bringing the war against al-Qaeda to an end, surely closed an important chapter in the long-term struggle against militant Islam. Others will rise to take bin Laden’s place at the top of the al-Qaeda hierarchy, but his death leaves a void in that organization that will be hard to fill.

The death of Muammar el-Qaddafi similarly brings to a close the sometimes odd but almost always violent struggle between the United States and Libya. Washington played an important role in Qaddafi’s downfall and thus helped set the stage for the transition that will follow. Libya may or may not move toward democracy, but at least it is free of one of the world’s most mercurial, brutal and enduring dictators.

Finally, the withdrawal of U.S. combat troops from Iraq looks to bring about a new stage in the nearly ten-year war. There is already a healthy debate about the purposes, costs and outcomes of this war, one which helped bankrupt our treasury in pursuit of objectives that even the Bush administration had trouble defining. But with that chapter’s conclusion, 2012 will usher in an opportunity for Iraq to make its own way, absent American forces on the ground.

Against this backdrop of successes, two issues stand apart. Iran remains intent on developing nuclear-weapons capability, and no combination of U.S. and international efforts—diplomacy, sanctions or threats—has led Iran to change its policy. The Middle East peace process, the subject of this essay, also stands apart. Described early and often by President Obama as one of the signature issues of his administration, the peace process has achieved neither a definitive end nor a tentative beginning. Rather, it is stuck.

The recent decision by the Palestinian Authority (PA) to seek reconciliation with Hamas and gain membership status in the UN reflects two important perceptions on the part of Palestinians—first, that serious negotiations with an Israeli government led by Benjamin Netanyahu are not possible; and, second, that the Obama administration cannot or will not exercise enough pressure on Israel to stop settlement activity, the Palestinians’ precondition for resumed negotiations. They may also view prospects of a two-state solution as diminishing rapidly.

For its part, the Netanyahu government in Israel has tried to portray itself as willing to talk, and the prime minister has repeatedly called for negotiations without preconditions. But the actual behavior of the Israeli government raises suspicions about that claim. The ten-month moratorium on new housing starts to which Israel agreed in 2009–10 did not stop the pace of ongoing construction in the territories. New housing projects beyond the Green Line have been announced regularly since 2010 and have accelerated recently in response to Palestinian diplomatic successes in UNESCO and elsewhere. Even when direct talks took place in September 2010, Netanyahu reportedly did not bring substance to the table. Israelis, like Palestinians, may have concluded that prospects for a two-state settlement are fading.

All this raises two fundamental questions: Are we at the cusp of a new phase in the long-running Arab-Israeli conflict, in which the two-state paradigm no longer motivates Palestinians and Israelis to seek a peace settlement? Have the diplomatic efforts of the Obama administration contributed to this possibility by failing to bring American diplomatic power to bear in the process?

THE ARAB-ISRAELI conflict has passed through three broad phases since the establishment of the state of Israel in 1948. The first phase was marked by the success of Zionism in creating the state and by the dispersion of Palestinians as a result of the 1947–49 conflict. The second phase began in June 1967, marked by the defeat of Arab armies in the Six-Day War, Israel’s occupation and settlement of the West Bank, Gaza and the Golan Heights, and the reemergence of the Palestinians at the center stage of the conflict. Today, we are living in the third phase, in which Israelis and Palestinians have been trying to reach a conflict-ending settlement through negotiations leading to a two-state outcome. The Madrid Conference in 1991, the Oslo accords in 1993 and the “road map for peace” process launched in 2003 have been directed at defining the modalities and substance of a peace settlement.

The Madrid Conference, the first breakthrough, launched parallel bilateral and multilateral peace talks. For the first time, Israel conducted bilateral peace negotiations with each of its neighbors. And for the first time, Arabs from the rest of the region sat with Israel to discuss transnational issues such as water, the environment and economic development. The Madrid talks proceeded in fits and starts but did not accomplish much substantively.

The Oslo accords resolved what appeared to be the most important lacuna of Madrid, namely, defining the role of the Palestine Liberation Organization, which had been left out of Madrid, and thereby giving Palestinian decision making the definitiveness it had previously lacked. In 1993, Israel and the PLO agreed on mutual recognition, a process of negotiations and a timetable designed to culminate in Palestinian statehood by May 1999. But things didn’t quite turn out that way. Negotiations proceeded almost endlessly but without conclusive results. Bad behavior by both sides created an atmosphere of distrust: Palestinian violence and terrorism never really stopped, nor did Israeli settlement activities. Palestinian leader Yasir Arafat found it difficult to overcome his persona as a revolutionary leader and embrace the core concessions and trade-offs required for success. Israeli prime minister Ehud Barak did reach beyond the political constraints of Israeli society to put forward far-reaching ideas, but even they fell short of the minimum requirements of the Palestinians. For its part, the Clinton administration tried hard to keep the process going but ultimately failed to deal with the two fundamental requirements of success: stopping the bad behavior of both sides and defining the substantive trade-offs required for a deal.

The road map was developed by the Bush administration and the so-called quartet of Middle East peacemakers (the United Nations, United States, European Union and Russia). Its aim was to correct some of the weaknesses of Oslo by aligning a three-stage process of negotiations with changes in the parties’ behavior. The two sides committed themselves to fulfilling certain responsibilities: for Israel, this meant a complete settlements freeze and increasing Palestinian mobility in the territories; for the Palestinians, it meant cracking down on terrorist infrastructure and accelerating the state-building process. The road map required mutually reinforcing actions from each side in parallel and sequentially. But this process also collapsed, primarily under the weight of Palestinian terrorism that the PA, under Yasir Arafat, could not or would not police.

In a last-gasp effort by the Bush administration to salvage the two-state solution, the Annapolis Conference was held in 2007, leading to intensive direct negotiations during 2008. To the surprise of everyone, these proved to be the most serious and far-reaching negotiations to date. Former prime minister Ehud Olmert, in his recently published memoir, details how close the parties came to bridging the gaps between them even on the most contentious issues of borders, settlements, Jerusalem and refugees. Some of what Olmert has written has been confirmed in the leaked “Palestine Papers” that provide insight into internal Palestinian deliberations on the core issues. And former secretary of state Condoleezza Rice confirms Olmert’s assertions in her own just-published autobiography. Indeed, it can be argued that the only element missing in the Annapolis process to help the parties bridge the final gaps was a robust American role. Rice traveled constantly in search of the finish line but never got the backing of the White House to bring serious enough American influence to bear on the negotiations.

Many believed the Obama administration would provide that final missing puzzle piece. Here was a White House that inherited a negotiating process that had produced significant progress. Here was a president who proclaimed at the outset that he valued peace in the Middle East as a U.S. national-security interest, not as a favor being done for the parties. Obama appointed a senior, experienced negotiator, George Mitchell, to carry the ball. And then the administration proceeded to fumble. Instead of a comprehensive peace strategy, Washington tried confidence-building measures, including the quest for a complete settlements freeze. The new Israeli prime minister, Benjamin Netanyahu, wouldn’t bite. The White House tried proximity talks, direct talks and, most recently, quartet-led talks designed to lead to further negotiations. Not only did the tactics not work, but the administration also was revealed to have little stomach for the rough-and-tumble of actually trying to advance the peacemaking process. Confronted with opposition to its ideas, Washington invariably retreated.

The result is that the processes and progress of the past are now in doubt. The search for peace is in a state of acute crisis, with many analysts arguing the basic paradigm of peacemaking is dead. But in the Middle East, as a friend once pointed out, dead is not really dead until it is dead and buried. The question is whether the peace process is merely dead, or dead and buried.

THERE IS no simple answer to the question of why this phase of peacemaking has defied resolution or definitiveness over the years. It has not been for lack of interest. Since 1991, leaders in the region have reiterated time and again their commitment to peace, even if their actions did not measure up to their words. It has not been for lack of vision. Even if policy makers could not reach a negotiated settlement, private individuals showed how it could be done. The Geneva Initiative and the Ayalon-Nusseibeh Agreement demonstrated that reasonable people on both sides could visualize a peace deal.

And failure has not been for lack of imperative. The Arab-Israeli conflict is not the most violent or dangerous conflict globally, perhaps not even in the top tier of dangerous conflicts. But it has become a chronic, enduring and open wound, susceptible to dangerous infection that generates fever throughout the region. On the Arab side, the conflict played no role in the first days of the Arab Spring; since then, it has become a rallying cry for disaffected Arab masses that get no fulfillment of basic needs and thus call on governments to deal with this emotional need at the very least. On the Israeli side, the persistence of the conflict raises the specter of demographic change that could call into question either Israel’s Jewish character or its democratic character if it continues to deny equal rights to a population under occupation.

If we are thus at the cusp of what may be a new stage in the Arab-Israeli conflict—one that turns the page and ends the chapter of negotiations leading to a two-state solution—what might a new phase look like? Palestinian president Mahmoud Abbas, in a May 2011 op-ed piece in the New York Times, argued that “Palestinian national unity is a key step” in preserving the chance for a just end to the conflict—a reference to the long-sought but elusive goal of reconciliation between the PA and Hamas. He added, “Palestine’s admission to the United Nations would pave the way for the internationalization of the conflict as a legal matter, not only a political one.” Does either element of Abbas’s vision of peacemaking hold out a possibility of success?

I met with senior Hamas officials in Damascus in October 2010, and I heard no flexibility with respect to their stated opposition to any conclusive peace with Israel. Hamas has told many interlocutors that it would accept a state in the West Bank and Gaza provided Israel withdraws from Jerusalem and allows the right of return for Palestinian refugees. Yet, this “acceptance” does not mean that Hamas would recognize Israel or declare an end to the conflict. To be fair, I suppose it should not be expected that Hamas would change its long-standing ideology in a meeting with foreign nonofficials, especially since Western officials refuse even to meet with representatives of the organization. But this stated position belies Abbas’s argument that national unity will help move the peace process forward.

Regarding Abbas’s second point, it is true that membership of Palestine in the United Nations would give the Palestinians standing to bring cases on their own before such global legal organs as the International Court of Justice and the International Criminal Court. Palestine could tie up Israel constantly with cases involving settlements, occupation practices, unilateral Israeli actions in building infrastructure and roads, and so on. Over time, Palestinian successes in these legal forums would create a presumptive case for a larger political assault on Israel as an apartheid state.

But Palestinian standing as a state is a two-way street, for Israel would also be able to bring Palestinians and the Palestinian state before the bar of international justice regarding ongoing terrorism, rocket fire and the like. While this legal process could achieve some measure of punitive damage, it is hard to see how it moves either party closer to a settlement. Abbas’s emerging vision of this new phase in the peace process is thus not very compelling, for it is a road that leads inexorably to a dead end of mutual recriminations and legal maneuvers.

Although Netanyahu has been somewhat less clear about how he envisages a next phase, the elements of the approach he is following appear equally unconvincing of his ultimate desire for a serious peace process with Palestinians. In a seminal speech at Bar-Ilan University in June 2009, Netanyahu coupled his willingness to accept a demilitarized Palestinian state next to Israel with a key demand: “I have already stressed the first principle—recognition. Palestinians must clearly and unambiguously recognize Israel as the state of the Jewish people.”

This is a challenging precondition from the leader of a state that has, until now, been unable to define its own character in a constitution. The creation of Israel surely fulfills the Zionist vision of Jewish self-determination and independence in the historical homeland of the Jewish people, but does that require others to recognize the character of the state as a precondition for negotiations? When I served as U.S. ambassador to Israel, then prime minister Ariel Sharon often expressed the same sentiment as Netanyahu regarding Arab acceptance of Israel’s right to exist as a Jewish state, but he cast it as an outcome of the peace process rather than as a precondition for negotiations.

In the course of just three days this past September, we were given additional insight into how the Palestinian and Israeli leaders see the period ahead. In their speeches to the United Nations General Assembly, Abbas and Netanyahu delivered spirited expositions of their respective positions. Abbas explained why it was time for the United Nations to accept Palestine as a full member state, and Netanyahu explained why Israel rejected this move. The diametrically opposed Palestinian and Israeli narratives of the conflict were on full view. Both sides point to exile from their homeland as refugees. Both are victims who have suffered at the hands of the other. Both seek recognition of the legitimacy of their historical experience. Both place a high value on the justice of their cause. Both are acutely insecure and have deep security needs. Both are attached to the (same) land. Both see themselves as nations with ties to ethnic brethren internationally. And both place a high value on the concept of national unity, although both are anything but unified internally.

In exposing their competing and complementary narratives so clearly, the two protagonists set aside any pretense of trying to rebuild the bridges of dialogue and understanding that had been constructed during two decades of face-to-face Israeli-Palestinian negotiations. Reflecting how far apart these parties had grown, that same week the international quartet limited itself to calling for “a preparatory meeting between the parties to agree [to] an agenda and method of proceeding in the negotiation”—in other words, a meeting to produce agreement on how to hold another meeting.

If anyone expected the United States to reassert the centrality of the two-state solution and of direct negotiations as the means to achieve that outcome, President Obama’s UN speech was something else entirely. He delivered a spirited defense of Israel, and he spared no words in defining the security and legitimacy dilemmas that Israel faces. After a tour d’horizon of many conflict environments, Obama stressed that “peace is hard. Peace is hard.” Peace, he said, will not come through UN resolutions. But in a twist away from the expected insistence on resumption of talks based, for example, on the agenda he set forth last May—starting with borders and security—Obama said: “Deadlock will only be broken when each side learns to stand in the other’s shoes; each side can see the world through the other’s eyes. That’s what we should be encouraging. That’s what we should be promoting.”

In other words, the president was saying that the future of this conflict will be defined by the ability of the two sides to cope with their national narratives. It is unclear what happens when Israelis understand how Palestinians see the world and vice versa. The question is whether, by that time, there will be anything left to negotiate.

YOGI BERRA once advised, sagaciously, that when you arrive at a fork in the road, take it. For the United States, the policy choice ahead is binary: Do we pull the plug on the life-support system of the peace process that we constructed in 1991, let this phase of Arab-Israeli interaction die a peaceful death, and try to develop a different paradigm for resolving the conflict? Or do we persist, maintaining the same goal of a two-state solution and essentially the same process of arriving at peace through bilateral negotiations? I don’t see merit in a third option of waiting it out, living with the status quo, allowing the conflict to “ripen” and choosing a different time for negotiations. There is no such thing as a status quo in conflict situations: things either improve or get worse. This conflict—if left to develop on its own and subject to the machinations of those on both sides who are intent upon disrupting any resolution effort—will get much worse, much faster than anyone can anticipate.

To suggest that the United States activate an ambitious peace strategy now, however, runs against the grain of what I have come to call the prevailing “Washington consensus.” At every meeting, working group or seminar in Washington at which the peace process is the topic, the discussion produces a chorus of the following sentiments: “It is too hard.” “Let it ripen until the parties are hurting more.” “The leaders are too weak or too ideologically opposed to peace.” “The United States cannot want peace more than the parties themselves.” “It is really up to the parties to get serious about peace.” “What if we fail?”

These are serious questions and observations. Yes, it is hard, but America can do hard diplomacy and succeed, as it has in the past. This conflict needs no more ripening; it is already overripe for resolution, and the idea of a mutually hurting stalemate—the centerpiece of the ripeness theory—has already applied to this conflict for years. Yes, leadership in the region is a problem, and even brilliant U.S. diplomacy will not offer a complete substitute; however, U.S. diplomatic strength can get the political juices in the region flowing, producing debates within the two societies as to whether leadership changes are required in order to move forward. Yes, we cannot want peace more than the parties do, but that is not the point: peace in the region is a U.S. national-security interest, and we should pursue that interest vigorously. As to the question of possible failure—well, that is not a serious question. All policies run the risk of failure, but no policy or strategy should be avoided simply because it may fail. A strong and determined U.S. policy will give our diplomats material to work with even if the parties do not immediately agree to what we are trying to accomplish.

One of the most serious questions posed is why Israel should take risks during this period of uncertainty in the Arab world. When its treaties with both Egypt and Jordan are coming under pressure from angry Arab publics, shouldn’t Israel hunker down and weather the storm? Israel faces serious security threats today as it has throughout its history. In addition to the potentially existential threat posed by a nuclear-armed Iran, Israel faces a very well-armed and hostile pair of nonstate actors—Hezbollah and Hamas (and other militant Islamist bedfellows in Gaza).

Despite these real concerns, it is hard to see how Israel’s security situation improves by passively awaiting the results of political change elsewhere. To be sure, Israel would need to approach negotiations today with extra care, given the enhanced risks associated with territorial withdrawals in an age of advanced rocketry, but Israel could gain potential political advantage by neutralizing, or at least dealing seriously with, the core issues at the heart of its long-running conflict with the Arabs. Indeed, this would be a moment when the United States and others would be more sympathetic to Israel’s security requirements in the context of peace negotiations, and thus a moment when Israel could gain some advantage by negotiating now, not postponing talks.

Even if the “Washington consensus” of naysayers and Israel’s reluctance can be overcome or circumvented, two key questions remain: Should the United States wait to activate peace diplomacy until after the 2012 election? And why should the president divert attention from pressing issues at home to focus attention on the Arab-Israeli issue?

Indeed, President Obama’s speech to the UN could be read as the political manifesto for his reelection campaign: focusing on the problems Israel faces and the support his administration has given to Israel’s vital security requirements. Clearly, this will sit well with the pro-Israel community in the United States that has raised questions about Obama’s commitment to Israel, and it has already lowered the temperature in the sometimes heated relationship that Obama has had with Netanyahu. However, as noted above, the Middle East does not take a break from conflict just because we are having an election. By postponing action now, the administration may find itself immersed in a real crisis, perhaps a violent crisis, even during the election campaign itself. Recall that Hamas’s escalation of attacks against Israel and Israel’s war against Hamas took place at the end of 2008, just after our last presidential election.

As to the president’s priorities, Obama himself, early in his tenure, elevated the issue of Arab-Israeli peace to near the top of his agenda. He has already invested political capital and presidential time on the issue. Ignoring it now, when the conflict-resolution process is in crisis, will undercut the very importance that the president previously attributed to it. Why should attacks from Republican opponents and a segment of the pro-Israel community that will not vote for him anyway deter President Obama from exercising leadership on this issue at a time of crisis in the negotiations? Indeed, a robust peace strategy now—constructed to be fair and reasonable—will allow the president to justify having devoted time and energy to this issue during his first term.

The only serious option, therefore, for a United States that sees itself as a leading world power is to act like a world power and lead. In the peace process, this would mean unveiling a comprehensive strategy now—right now, when everyone else is drifting further and further apart. Such a strategy should encompass at least four elements:

First, we should develop a set of parameters on all the key issues which would then become the starting point and terms of reference for negotiations. These parameters should be developed on the basis of where the two sides left off negotiations in 2008. In laying them out, Washington would explain that we intend to play an active role in helping to build bridges and overcome gaps between the parties. The negotiations would be bilateral, but we would accompany the talks closely so as to keep edging them forward.

Is it possible for the United States to develop parameters that will not drive the parties further apart? Since we know where the parties left off in 2008, we know how far the leaders then were prepared to go. These starting points would be harder to accept for Prime Minister Netanyahu, who was not in office then, than for President Abbas, who was. The U.S. intention would not be to create a political crisis in Israel, but Washington should be aware that such a crisis could erupt over the parameters. To the extent that they are crafted artfully and fairly, the United States needs to be prepared to defend these parameters in a sustained manner, even if a political crisis intervenes in Israel.

Second, Washington should encourage more ambitious state-building efforts by the Palestinians. The PA should be expected to do more to create the institutions of statehood. Under Abbas and Prime Minister Salam Fayyad, the PA has undertaken some reforms, especially in the security area. But more can be done. In the context of a serious negotiating environment, Palestinians can be asked to take more significant steps against those who commit acts of violence against Israel and those who operate outside the purview of the national authority.

Next, the United States should reiterate the need for the two sides to meet the commitments they agreed to in the road map, especially within the context of a comprehensive strategy for peacemaking. America needs to be ready to monitor the performance of the parties, hold them accountable for the failure to fulfill their commitments and exact consequences for road-map violations.

Last, Washington should press Arabs to activate the Arab Peace Initiative now. It is not enough for the Arabs to promise recognition, security and peace for Israel at the conclusion of the peace process; Arabs should be asked to start processes of reconciliation in parallel with peace negotiations. This is not far-fetched. In 1992, most Arab states agreed to participate with Israel in multilateral negotiations. Subsequently, most Arab states participated with Israel in four regional economic summits, designed to build private-public business and trade partnerships. As Israelis and Palestinians commit to the challenging work of negotiating peace, Arabs should be expected to play an affirmative role in demonstrating that peace yields tangible rewards for everyone in the region.

Even if elements of this strategy are not accepted by both parties, it remains a sustainable one that need not and should not be abandoned at the first sign of opposition. Until now, our diplomats have been working with discrete tactical approaches—a settlements freeze, proximity talks, direct talks—but without terms of reference, and the administration has backed away early when the tactics have not worked. But the strength of a comprehensive strategy should give the United States the confidence not to accept “no” as an answer. Even if the strategy does not work immediately, it will give Washington significant diplomatic maneuvering space for a long period ahead, as well as significant political benefits in our international diplomacy.

A report card on the administration’s handling of the peace process until today would probably say: “Too many erratic beginnings; lacked a definitive outcome.” It is unrealistic to believe that a definitive outcome can be achieved before our next election, but it is not too late to craft a wise beginning—a strong, reasonable and sustainable peace strategy that forms the basis of the next phase of Middle East peacemaking.

Daniel Kurtzer is the S. Daniel Abraham Professor in Middle Eastern Policy Studies at Princeton University’s Woodrow Wilson School of Public and International Affairs. He is a former United States ambassador to Egypt and Israel.