One can only look on at the ruination of the Bush Administration's Middle East policy with a sort of sick bemusement. In the past year the newly won gains of the Cedar Revolution in Lebanon have literally gone up in smoke. Israel has failed to destroy Hizballah in a short, nasty summer war; instead the rejectionist organization is the toast of the Arab world. Iran successfully flouts international will, moving ever closer to developing a nuclear weapons program. The Taliban is making a comeback in Afghanistan, and Osama bin Laden and Ayman al-Zawahiri are still at large on the frontier with Pakistan. And Iraq is . . . well, Iraq. The international standing of the United States is at its lowest ebb in memory, while radical Islamists have been the beneficiaries of colossal American blunders in the region. Everything looks very black indeed.

Existing U.S. and Israeli strategies are rooted in denying the centrality of the Israeli-Palestinian dispute to the problems that plague the Middle East. This approach has failed. The way forward is to concentrate on solving the ongoing, seemingly never-ending Israeli-Palestinian conflict, which, because the many problems of the region are so interlinked, can create, in turn, momentum for dealing with the other regional disputes that feed it.

As is too often the case, the Washington establishment is confusing caution with wisdom, urging the United States to be tentative, just when circumstances demand that it should be bold about the peace process. An August 29, 2006 editorial in the Washington Post is emblematic of this fallacy. While acknowledging that both Hizballah and Hamas are "chastened" following this summer's conflict (as is Israel): The article urges that no big steps be undertaken. The silver lining of the ghastliness of the present situation, on the contrary, is precisely that sensible people, whatever their views of the conflict, are beginning to reassess some of the intellectual shibboleths that have helped produce the diplomatic futility of the past decade.

The first lesson of recent events must be that unilateral moves of any kind rarely work in a region where a whole host of actors have a genuine stake in the outcome-and the power to influence developments for good or ill. It is entirely understandable-in terms of Israeli domestic sentiment-that Prime Minister Ehud Olmert and his Kadima Party campaigned on a platform of setting unilateral boundaries in the West Bank and Gaza. After decades of negotiating with the duplicitous, mercurial, corrupt, maddening Yasir Arafat, it is hard to blame Israelis for yearning for a peace without negotiation.

Yet a unilateral settlement, without making the fractious Palestinians stakeholders in the outcome, is no settlement at all, since it would only lead to constant irredentist claims being advanced by different branches of the Palestinian community. At the same time, an arrangement that left the Palestinians in charge of disconnected Bantustans would never be accepted by the Palestinian people, the rest of the Arab world or the international community in general. The very peace and stability that Israelis hoped would emerge from disengagement from most of the West Bank and Gaza would continue to be denied to them.

Nor should the U.S. administration have ever endorsed this approach. Quite apart from its dreadful effects on America's own vital interests in the War on Terror-since Al-Qaeda and its allies have most effectively exploited the Israeli-Palestinian issue-this strategy was always bound to leave Israel in a permanently precarious strategic position. "Supporting" Israel in this way does not represent true friendship for the Jewish state: Friends don't encourage friends to drive drunk.

There is growing recognition within the American Jewish community (to say nothing of sentiment in Israel itself) that President Bush's encouragement of a hard-line Israeli strategy is not in the interests of Israel. An editorial in the leading American Jewish liberal newspaper Forward noted in August 2006 that while "Bush has been convinced by self-appointed spokesmen for Israel and the Jewish community that endless war is in Israel's interest", he needed instead "to hear in no uncertain terms that Israel is ready for dialogue, that the alternative-endless jihad-is unthinkable." Forward argued that Israel should begin immediate negotiations with all its neighbors, including Syria, and aim at a comprehensive regional peace settlement. Similar views have been put forward by leading Israeli moderates, like the former foreign minister Shlomo Ben Ami, and by numerous commentators in leading Israeli newspapers, including Ha‘aretz and Yedioth Ahronoth.

Secondly, we should learn from the latest crisis that we (and the Israelis) need to talk to democratically elected representatives, whatever their views. Contrary to neoconservative and liberal hawk fantasies, talking to people one doesn't agree with is not a sign of weakness. It is called "diplomacy." The need for a settlement of the Israeli-Palestinian conflict through negotiation is unaffected by Hamas's victory. Why? Because, frankly, in the end we will have to negotiate with whomever the Palestinians elect. That does not mean that we should give anything to Hamas in advance, but unless we get negotiations started, then by definition we will never know if compromise is in fact possible.

And there is no sense in demanding radical prior concessions from the Palestinians before we even begin talks with them. If the British had done that vis-à-vis the ira in the Northern Ireland peace process, there would have been no peace process. We do not get to pick our interlocutors; the Palestinian people do. The belief that we can reach a lasting settlement "with someone else" among the Palestinians-and that this arrangement would be seen as legitimate-is delusional. Again and again, the Israeli and U.S. governments have convinced themselves that they could find a more moderate alternative to the existing Palestinian leadership. Again and again, the result has been that they have actually gotten a more radical one. This is especially true today, as the economic and military pressure being exerted by Israel in an effort to get rid of Hamas is only infuriating ordinary Palestinians further.

Third, making either side go first in terms of overall concessions is an approach that is simply impossible; both sides are too traumatized for such a diplomatic strategy ever to work. The problem with Bush's "road map" as it stands is that it requires the Palestinians to make critical concessions before receiving concrete benefits. Similarly, many Israelis criticized the private "Geneva Initiative" for calling on Israel to make up-front concessions before receiving major concrete gains.

Fourth, the gradualist approach, typified by U.S. strategy between the 1993 Oslo Agreement and the Camp David talks in 2000, has also shown its grave limitations. Leaving all the really hard stuff until the end while engaging in small "confidence-building" steps has not led to either mutual confidence or peace. Rather, both the Israeli and the Palestinian peoples must see the large-scale, concrete advantages to making painful concessions-and they must see them quickly-for any peace process to weather the political storms that are bound to follow.

Therefore, the clear outlines of a comprehensive and final agreement need to be first laid down by Washington, then secretly negotiated between local parties in detail over a period of time so they become stakeholders in the process. Only when all concessions and benefits are worked out simultaneously does any agreement stand a real chance of sticking. This is an entirely different modus operandi from what has been attempted throughout the Bush Administration, and most of the Clinton Administration too. But this appalling record alone should be the impetus for the rest of us to think anew.

 We all know the broad parameters of any real and lasting settlement between Israel and the Palestinians: two states with secure borders recognized as final by the whole of the region, as well as by the United States, UN, EU and NATO; security guarantees for both parties; using the 1967 borders as the basis for the territorial settlement, leading to a real, undivided Palestinian state on the West Bank; certain limited land swaps, in particular relating to the three largest Jewish settlement blocs in the West Bank; a secure Palestinian transit corridor link between the West Bank and Gaza. Along with these parameters, the Palestinians also get to plant a symbolic flag in East Jerusalem, while Ramallah remains the true capital, and give up their right of return, except for symbolic cases, in return for generous compensation.

These practical, non-millennial goals must obviously form the basis of any settlement. They derive from Yitzhak Rabin's belief in land for peace, of turning the vast majority of the West Bank (and Gaza) over to a Palestinian state in exchange for peace not only with the Palestinians but with all of Israel's neighbors. As with all good deals, it will entirely satisfy no one. However, one can sincerely hope that there is enough there for everyone to entice realists in both camps to make the bold sacrifices necessary for peace.

These sacrifices may well have to be physical as well as political. In a rare flash of insight, Thomas Friedman once wrote that for peace between Israel and the Palestinians to be achieved, the leaderships of both sides would have to fight civil wars against their own rejectionist radicals. This has often been the case in such situations. The peace treaty of 1921 between Britain and the ira led to a civil war in Ireland in which the greatest ira leader, Michael Collins, was killed by men he had previously led for signing and sticking to the treaty. In Israel, a Jewish rejectionist also murdered Yitzhak Rabin; and this fate will threaten future Israeli and Palestinian leaders who sign a genuine peace treaty. Nevertheless, as Rabin and Collins courageously recognized-but Yasir Arafat did not-such risks are necessary if peace between Israel and Palestine is to be achieved.

Of course, this plan leaves plenty of unanswered questions: Can Hamas be prodded into categorically accepting Israel's right to exist? Will the rest of the Arab world-not to mention Iran-accept such a settlement? Can Abu Mazen (Mahmoud Abbas) prove a stabilizing influence on the hotheads surrounding him, or will he remain well-meaning but ineffectual? On the Israeli side, can a newly threatened Israel be persuaded to ignore the siren song of unilateralism? Will the policy of assassinating senior Palestinian leaders be quietly shelved? After the Lebanon disaster, will the Israeli people avoid the lure of their own rejectionist right, led by Netanyahu? Can settlers in the West Bank be politically handled by any sitting Israeli government? Can a leader of unimpeachable stature, such as Rabin and Sharon in their own ways, be found to make the concessions necessary to secure Israel's future?

All these questions are very hard to answer, and the response could well be "no" to most of them. This does not mean that the effort to reach a settlement should be abandoned. A peace deal founded on the ethical realist principles discussed here stands at least a chance of acceptance. Moreover, the Israeli-Palestinian conflict and its ramifications are so dangerous for vital U.S. and European interests in the struggle against terrorism that elementary patriotism simply demands a determined effort to end this conflict.  One good thing about the present disastrous state of the region is that things could hardly be worse. It should therefore be obvious that the United States must try again, and try differently.

Let's consider some of the "hard stuff" in light of an ethical realist approach to solving this conflict. One aspect of a lasting settlement which has never been discussed in necessary detail is that of compensation to Palestinian refugees and their descendants in return for giving up their legal right to return to their former homes-a matter of immense emotional and moral importance to Palestinians, but naturally completely unacceptable to most Israelis. Properly addressed, this can become a way not only of helping solve the Israeli-Palestinian conflict, but of bringing economic and social development to the entire region.

So the Palestinian refugees and their descendants must be guaranteed compensation for their lost land and property at a level set by a neutral international tribunal, and to an extent that will not only allow them to create prosperous and contented lives, but will also transform the economic prospects of the countries where they live: Jordan, Syria, Lebanon and, of course, the Palestinian territories. Given the centrality of the Israeli-Palestinian conflict to the struggle against terrorism, and the centrality of that struggle to American and European security, the sums made available should be comparable to those provided by the United States to Europe and East Asia during the first decades of the Cold War.

The Europeans should pay the overwhelming share of this compensation. They should commit themselves to this in advance, as an essential part of bringing about a settlement. If they object, they should be harshly and publicly reminded of Europe's historical responsibility for anti-Semitism, and therefore indirectly for the creation of the state of Israel and the Israeli-Palestinian conflict. The U.S. Congress will doubtless compensate Israel for the withdrawal of West Bank settlements. If peace is to be achieved, someone also has to fully compensate the Palestinians-and that can only be the Europeans.

The European Union's role in a settlement can also be vital in other ways, and can be used not only to help bring Middle East peace but to strengthen transatlantic relations.  This involves the critical interlinked issues of long-term security and identity. For an agreement to work, both sides must feel that there are real external guarantees for their future security. Historically, Israel is suspicious of the United Nations, for the obvious reason that over the years the General Assembly has been remarkably tone-deaf about Israel's concerns or even existence. Weak un forces can also guarantee Israel very little.

On the other hand, given their present daily lack of security, many Palestinians feel they have nothing to lose by backing extremists and terrorist attacks. Only the United States, in league with its European allies as well countries in the region such as Jordan, Egypt and Saudi Arabia, can provide the military, economic and diplomatic guarantees necessary to reassure both sides.

Never has more true Euro-Atlantic cooperation been needed than over this issue. The Israelis will never agree to a final settlement without the Americans being in the room, just as the Palestinians will never agree to such a deal without European involvement. Too often transatlantic differences over Israel and the peace process have been seen as an insolvably divisive issue imperiling the transatlantic relationship; the reality is that there is a real complementarity here, if only the Americans and Europeans can coordinate a common approach to the crisis based on both ethics and realism.

As part of the negotiating process, the European Union should formally promise Israel and the Palestinian Authority that if they sign an internationally recognized settlement, they will be accepted into the EU accession process (something which Israel already deserves if its economy alone were at issue). U.S. pressure on the EU for this should be considerably stronger even than that exerted over the issue of Turkey's EU membership.

Neither the EU's Barcelona Process (aimed at some kind of very gradual and limited re-integration of the two shores of the Mediterranean) nor any other presently existing treaty or organization offer chances of future aid and security guarantees sufficient to move Israelis and Palestinians out of their present positions. Such aid and guarantees can only be provided in the long run by the two leading Western organizations, the European Union and NATO. The EU represents economic, social and political integration into the West. NATO's Article V guarantee represents long-term military security.

Of course, actual accession will depend on reforms which are in any case in the interests of the United States, the international community and these countries themselves to introduce. Above all, the Israelis must grant full equality of citizenship to the Palestinian Arab minority within Israel, and the Palestinians must move to create a genuine modern democratic state-ending their present rampant levels of corruption, maladministration, arbitrary rule and political violence. Just as in Turkey, gradual integration into the EU would be the best way in the long-term for moving Palestinian Islamists towards democracy and pluralism. It is essential that both states-not just the Israelis-be accepted as possible candidates for membership, because, like it or not, even after a settlement they are going to remain closely intertwined.

In the Balkans, it is generally recognized that the only long-term hope of resolving the frozen ethnic conflicts of the region lies in the integration of that region into the eu and nato. The prospect of membership in these organizations played a key role in preventing national conflicts in the Baltic states and elsewhere. There is no reason in principle why this could not be the case in Israel and Palestine as well.

Accession to the EU would in a sense take both countries out of the Middle East. Especially if combined with nato membership, it would give the Israelis tremendous added security in terms of their identity and their economy. It would turn the Palestinians from an oppressed foster child of the Muslim world (and a pretty shamefully and hypocritically treated one at that, as far as the behavior of many Muslim governments towards the Palestinians is concerned) into the richest and most prestigious of all the Arabs, and ambassadors of the Muslim world in the West. This, by the way, is a role to which the Palestinians are already entitled, since, together with the Lebanese, they are by far the best educated and most economically dynamic of all the Arab peoples, with the strongest intellectual and cultural presence in the West. From the European side, it would "complete" the integration of the eastern Mediterranean basin in political and economic terms-as set out in several EU documents and plans.

NATO responsibility for securing borders would not begin until the comprehensive agreement was in place. NATO troops would be sent to help guarantee such an agreement, not to help create one. Too often, as in the present case in Lebanon, peacekeepers are offered up on the altar of unresolved conflicts to be at best humiliated, and at worst killed; nato forces, therefore, must not be sent into the region until there is a genuine peace to keep, complete with the formal commitment of the United States, UN, EU, Contact Group and major Arab states to adhere to such an agreement. But whatever the specific details of a final diplomatic outcome, a Western military presence will be necessary to underwrite the agreement. For once though, this is a use of our troops that can be explained to the folks back home, and in terms of the American national interest.

This may seem to many readers an ethical but hopelessly unrealistic approach. But if as has so often been argued by both Republicans and Democrats, and by certain European leaders like Tony Blair, the War on Terror really is equivalent in strategic and moral importance to the Cold War, then it demands a similar level both of commitment and imagination on the part of the leaders of the West.

It may also be objected that the Europeans would never agree. Well, a secondary motivation for this strategy from a U.S. point of view would be precisely to take some of the weight of responsibility-and blame-for the Israeli-Palestinian imbroglio off the shoulders of the United States and place it where, after all, it ultimately belongs historically. If the European Union did ultimately refuse to accept even the possibility of Israeli and Palestinian membership, the Europeans would have demonstrated their hypocrisy and irresponsibility towards the Middle East. And European criticisms of U.S. policy would go very quiet for awhile. However, shifting blame onto the Europeans is not of course the goal of such an ethical realist approach to the Israel-Palestinian conflict. The point is to solve the problem.

Though both a clear U.S. decision on the contours of a final settlement and strong U.S. pressure on Israelis and Palestinians would be essential to bringing about peace, in the longer run a European role would also help the United States to step back from its present level of embroilment in the region, and to qualify-or at least veil-its present domination of the Middle East. As Robert Pape and others have demonstrated in The National Interest and elsewhere, America's present overt domination is bitterly unpopular in the region and serves as a principal recruiting tool for Al-Qaeda.

Given the unstable and violent nature of the Middle East, any power attempting to exercise this kind of hegemony is also bound to be drawn into repeated wars-with potentially disastrous results for America's wider global leadership. It is highly desirable therefore that the United States take a step back, and seek both to limit its power and to veil it as far as possible behind that of regional states and regional and international agreements. We should help Israel and Palestine to become a bridge between Europe and the Middle East, rather than a bloody, embattled and permanently endangered outwork of the United States.

For the United States to take a step back in this way would immensely further U.S. goals in the whole region. As T. E. Lawrence said of his Bedouin allies during the Arab revolt in the First World War, "while very difficult to drive, the Bedu are easy to lead; if you have the patience to bear with them. The less apparent your interferences, the more your influence."¹

Speaking at a forum organized by The Nixon Center in New York City this past September, Pakistani President Pervez Musharraf closed his remarks with a piece of advice for policy-makers in Washington. The United States cannot hope to be successful in achieving its strategic goals in the larger Arab and Islamic world of the Middle East and South Asia without making progress toward a resolution of the Israel-Palestine conflict. "The time is right", he said. We wholeheartedly agree.

John C. Hulsman is the first von Oppenheim scholar in residence at the German Council on Foreign Relations in Berlin. He is a contributing editor to The National Interest. This essay expands and develops points raised in Ethical Realism: A Vision For America's Role In The World (Pantheon Press, 2006), co-authored with Anatol Lieven.

¹ For more on the central role of legitimacy in the region see, John C. Hulsman and Alexis Y. Debat, "In Praise of Warlords", The National Interest, No. 84 (Summer 2006).