A quiet diplomacy on the Mideast peace path

The current sturm und drang in U.S.-Israel relations cloaks a surprising development: President Obama and Prime Minister Binyamin Netanyahu are beginning to develop a constructive working relationship sensitive to the legitimate concerns of the other.

Israel's Bureau of Statistics reported in May, for example, that in the first quarter of 2010 there were zero building starts in the West Bank settlements -- a demand Obama had made at the outset of his administration. Since Vice President Biden's embarrassing visit to Jerusalem in March, Netanyahu has quietly blocked new building tenders in East Jerusalem, demolitions of Palestinian housing and evictions of Palestinian residents there.

Reciprocating, Obama recently announced an additional $205 million in military assistance to Israel to pay for the deployment of anti-rocket defense systems for Israeli border towns. Last month, Netanyahu praised the Obama administration for securing passage of the latest U.N. Security Council resolution ratcheting up sanctions on Iran's nuclear program. Indeed, for a year now, the Israeli and American national security establishments have been coordinating closely to thwart Iran's nuclear ambitions.

Those who view Israel as a liability and long for a president who will impose peace on Israel will find this unwelcome news. But those who seek a breakthrough in the Middle East peace process and the effective curbing of Iran's nuclear ambitions -- including moderate Arab leaders -- should welcome what appears to be a recognition by Obama and Netanyahu that neither can achieve their purposes unless they work with, rather than against, each other.

The flotilla incident was an important test of this newfound comity. Israel's bungled interception of the Mavi Marmara put Obama in an awkward position, forcing him to choose between condemning Israel, thereby winning brownie points with the Muslim world, and standing up for an embattled ally's right to defend itself. Working closely with Netanyahu -- they spoke at least three times on the phone during the crisis -- Obama forged an approach that prevented a rupture in Turkish-Israeli relations, headed off condemnation in the U.N. Security Council, shaped an investigation palatable to Israel and is easing the Gaza blockade closure in ways that meet the requirements of normal life for Gazans while honoring Israel's legitimate security concerns.

However, Obama's protection of Israeli equities at a time when the rest of the world is busy remonstrating for Israel's tragic killing of militant protesters is not cost-free. The president's outreach to the Muslim world has been forfeited; the only thing that can compensate is serious movement to resolve the Palestinian problem.

In this regard, Netanyahu's freezing of housing starts in the West Bank and avoidance of provocative actions in East Jerusalem helps set the stage. The Palestinian Authority's policing of the West Bank territory under its control to prevent violent attacks on Israelis begins to demonstrate that there is a responsible Palestinian partner. Moreover, the Arab League has formally endorsed Palestinian entry into "proximity talks" with Israel -- a mandate that it did not withdraw despite the Gaza crisis.

Though few seem to have noticed, these factors combine to create the most conducive environment for peace negotiations since the outbreak of the second intifada in 2000.

Yet in less than four months, unless progress is made on borders and security issues and direct negotiations commence, Netanyahu will come under heavy pressure to unfreeze settlement activity, and the Arab League mandate will be withdrawn. This cannot be in the interests of Netanyahu or Obama as one struggles to overcome international opprobrium and the other seeks a breakthrough on a "vital national security interest."

The question remains whether they can overcome the mistrust that had permeated and poisoned their personal relationship and build a partnership for peace. Can Obama convince Netanyahu that he seeks his success as a peacemaker rather than the downfall of his right-wing coalition and that he means it when he says he is "determined to prevent Iran from acquiring nuclear weapons"? Can Netanyahu convince Obama that he is serious about achieving the two-state solution rather than playing for time until the American electoral cycle kicks in? In addition, can Netanyahu encourage Obama by doing his part to isolate Iran through entering peace negotiations with Syria and calming things down on Israel's northern front?

Two simple human gestures could create an environment for testing these propositions. When Netanyahu comes to Washington next week, Obama should invite him alone to Camp David for an afternoon walk in the woods. For his part, since he models himself on Winston Churchill, Netanyahu needs to make a real effort to take Obama into his confidence, much as Churchill wooed Roosevelt in the run-up to America's entry into World War II.

If they can build a common understanding for a path forward, Netanyahu should reciprocate by hosting Obama in Israel, where he can help the president begin the overdue process of rebuilding the Israeli people's trust in American steadfastness and erode their sense of embattled victimhood.

As Churchill said, "To jaw-jaw is always better than to war-war." If Obama and Netanyahu can learn to "jaw-jaw," perhaps they can also achieve real peace.

Martin Indyk, vice president for foreign policy at the Brookings Institution and the author of Innocent Abroad: An Intimate Account of American Peace Diplomacy in the Middle East.