During his March trip to Israel, US President Barack Obama was greeted warmly by Israeli Prime Minister Benjamin Netanyahu. But for all the public display of amity and understanding, the visit was for each leader a tentative embrace. It is bad policy to be complacent about the policies of a superpower, especially one headed by a newly re-elected, second-term president. However difficult it is for some to believe, Netanyahu is worried about a new Obama plan for peace between Israel and the Palestinians.

There is, however, every reason for the Israeli leader to feel confident about the limits of a US initiative. During the president's first term, Netanyahu successfully deflected Obama's signature call for a settlement freeze and withstood half-hearted American efforts to reinvigorate diplomacy with the Palestine Liberation Organization (PLO).

Today, nothing can be taken for granted, particularly during the second term of a president who is said to believe that Israel's best interests require an end to the occupation and creation of a sovereign Palestinian state. To hasten that objective, US policy in the coming months appears to aim at improving the Palestinians' “quality of life” as a means of re-energizing a broader diplomatic engagement.

During the visit, Netanyahu confidant Yitzhak Molcho traveled quietly to Ramallah to brief Palestinian Authority (PA) President Mahmoud Abbas [Abu Mazen] on Netanyahu's ideas for running in place. Mohammad Mustafa, head of the Palestine Investment Fund and erstwhile candidate for the post of prime minister, briefed Obama for 10 minutes on the PA's economic agenda. Netanyahu opposes key elements of PA priorities that would be at the heart of any successful effort to energize a Palestinian economy disfigured by occupation. These priorities include progress on developing the gas fields off the Gaza coast, a reduction of Israel's controlling presence in Area C, comprising 60% of the West Bank, and the development by Palestinians of the northern coast of the Dead Sea.