The toughest meeting of Barack Obama's young presidency is approaching. In the next few weeks, he will have to sit down with Israel'sBinyamin Netanyahu. The difficulty is not just that the prime minister refuses to accept the right of a Palestinian state to exist and thereby shows the Palestinians have no partner for peace.
Far more burdensome are the ghosts of US policies past. If Obama is sincere in wanting to break the stalemate of the Middle East's core conflict, he will have to launch the US relationship with Israel on to radically new lines. Israel must be treated as a normal country. It cannot enjoy permanent licence to escape criticism for practising policies that would be condemned if carried out by any other country's government. Even if Israelis, through their complex coalition arrangements, had anointed a more progressive and enlightened leader, this would be necessary. It is doubly essential now that Israel has chosen a man of aggressive and narrow vision.
The day of the blank cheque must be over. The day of the huge cheque must be over, too. Why should a country with one of the world's highest per capita incomes receive around $3bn annually, or roughly a third of the US foreign aid budget (not including extra support from the Pentagon)? Why should it not have to account for its purchases like every other recipient country – a conscious lack of oversight that allows Washington to turn a blind eye to the fact that US tax dollars are financing illegal settlements in Jerusalem and the West Bank and helping to build the so-called apartheid wall?
Unless Obama ends America's special relationship with Israel, this omission will be the achilles heel of his foreign policy. America's standing in the Middle East, its influence in the Gulf, its image in the Muslim world, its relationship with Iran, and even its support in Europe are all linked to the way it treats Israel.
Obama's fulsome comments about Israel before his election already suggested that this was likely to be his most dangerous weakness. His first 100 days in power have done nothing to negate that. His speeches in Turkey, which were directed at Muslim audiences, showed no recognition of the fact that most Turks, Arabs and Iranians see US policy towards Israel as unfair and partisan.
His resounding appeal in Prague for a nuclear-free world contained no reference to Israel's nuclear arsenal or the need for all nuclear countries (including India and Pakistan) to join the non- proliferation treaty. If Iran, a signatory of the NPT, is rightly pressed to adhere to the requirement for transparency, it is hypocrisy not to press the non-signatories to be as honest. To argue that countries which have not signed up are exempt from the rules may be legally right, but is politically absurd. Obama's admirable wish to reduce the world's nuclear stockpile cannot stop at the gates of Dimona and the sites where Israel's nuclear warheads are kept.
Israel's decades of indulgence from US presidents and a largely supine Congress have produced a culture where it virtually dictates what US policy should be. Israel helped to empower Hamas as a way of undermining its then bugbear, Yasser Arafat. Now that Hamas is independent, strong and popular, Israel sees it as the new target. The Obama administration should not go along with that. As David Gardner argues in his excellent book, Last Chance, "boycotting Hamas has been self-defeating. There is no legal or moral reason why Hamas – or anyone else – should recognise a state that refuses to define its boundaries, which are being expanded daily on Palestinian land."
Seeking to destroy Hamas after it won the Palestinian elections was, apart from the invasion of Iraq, Bush's biggest foreign policy blunder, and one that the European Union foolishly supported. Some European governments would like to change. They have held indirect talks with Hamas and may move to direct ones. Obama should do the same.
If Washington can talk to North Korea and Iran, it has no reason to boycott the people who won the last Palestinian elections and are likely to win the next one. Far from defeating Hamas, Israel's war on Gaza has made it stronger while further rein forcing Israel's image as a bully. By the same token, the US needs to talk to Hezbollah in Lebanon. Israel's war on Hezbollah in 2006 was as brutal as its war on Gaza this year, nothing more than the old strategy, taken to a grotesque level, of demolishing homes as a collective punishment.
Now Netanyahu is seeking to link Iran even more closely to Israeli policy than the former prime minister Ehud Olmert did. Without moves to stop Iran's suspected pursuit of a nuclear bomb and its support for Hamas and Hezbollah, there can be no chance of Israel agreeing to peace talks, his officials are saying.
The most important thing that Obama should tell Netanyahu is that Washington rejects such linkage. The main source of tension in the Middle East and the Gulf is not Iran, but Israel's occupation of Palestinian lands. An old issue cannot be hidden by a new one. Until Israel pulls back to the 1967 borders, give or take some land swaps, under international agreement, Palestinian resistance will continue – and other states will be entitled to support it.
As for an attack on Iran's nuclear facilities, Obama must reject it openly. When Olmert raised the issue last year, as the Guardian reported in September, even Bush told him it was unacceptable because an attack would be seen as having US support, since Israel's bombers would have to fly across US-controlled airspace in Iraq.
Bush saw that his last hopes of retaining credibility in the Muslim world would collapse, but his message to the then Israeli prime minister was made privately. Obama should not only tell Netanyahu the same thing. He should give his message loud and clear. He should also declare that any US attack on Iran is off the table. What Washington rightly warns Israel not to do, it cannot reserve the right to do itself.
Obama's third point should be that he does not stand behind the letter that Bush wrote to Ariel Sharon in 2004, accepting Israel's settlements in the West Bank as "new realities" that need not be abandoned. The document was not a treaty or even a bilateral government agreement. It should be overridden by a new letter stating that the US considers every post-1967 settlement illegal. Only by making a dramatic break from previous American policy can Obama prepare the ground for a lasting agreement between Israel and the Palestinians. Mediation cannot succeed when the mediator treats one side as special.
