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How Iran's election – and three others – have reshaped Mideast

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President Obama's willingness to take a firm stand with Israel on certain issues, meanwhile, marks a distinct departure from the Bush administration. He and Netanyahu aren't exactly two peas in a pod. Even if they were, the Israeli leader would have to consider the demands of his right-wing allies or risk having his government fall apart.

What does it mean for Arab-Israeli peace?

Though faced with the immediate challenges of a global financial crisis and two wars, Mr. Obama has confounded expectations by emphasizing the importance of the Israeli-Palestinian peace process. In his June 4 address to the Arab world in Cairo, he spoke at length about the conflict.

But Arabs are looking for action. The initial test of Obama's resolve, many say, lies in his ability to freeze Israeli settlements in the West Bank.

In a nod to Obama, Netanyahu promised in a major speech June 14 that no new settlements would be built in the West Bank and said he supports the creation of a "demilitarized" Palestinian state. But the Palestinians, he added, must recognize Israel as a Jewish state. That condition is unlikely to be accepted by Palestinians, offering little hope for rapid progress in peace talks. Other obstacles: the lack of Palestinian unity and the collapse of Palestinian political and economic institutions.

Under the former government of Prime Minister Ehud Olmert, Israel held indirect peace talks with Syria for almost a year. Damascus broke off the talks in December in protest of Israel's offensive against Hamas in Gaza. Netanyahu has shown no inclination to resume those talks.

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