The inability of Tzipi Livni to form a coalition government in Israel and her subsequent calling of elections has sadly obscured two unexpected peace proposals that emerged in her final weeks of horse-trading. The first was an examination by the foreign ministry into a possible non-aggression pact with Lebanon. The second comes after Labour leader Ehud Barak proposed a revival of Saudi Arabia's 2002 peace plan which offers Israel universal recognition in the Arab world were it to fully withdraw to its pre-1967 borders.

The forthcoming election battle between Kadima, Labour and Likud will no doubt lead to a simplification of foreign policy issues into a case for engagement or disengagement with the Palestinians and Israel's Arab neighbours. However, these two plans deserve closer analysis given they represent a key choice that Livni will face if she succeeds in defeating Binyamin Netanyahu for the premiership in February: whether to persist with Israel's traditional bilateralism in dealing with the Arab World, or adopt a more multilateral approach.

With the exception of the 1991 Madrid conference, which then prime minister Yitzhak Shamir only reluctantly attended after serious economic pressure from the USA, the Israeli government has always preferred to handle Arab states individually. From the Camp David Accords with Egypt in the late 1970s to rounds of bilateral talks with Jordan, Syria and the Palestinians in the 1990s after the aberration of Madrid, Israel has actively pursued a divide-and-rule strategy. Thus it has avoided facing a united Arab front and been able to gain maximum concessions from its neighbours. Even Bush's ill-fated Road Map, and the subsequent Annapolis summit, which did include representation from some Arab states, had a bilateral flavour. Rather than deal with all its unresolved conflicts with Syria, Lebanon and, theoretically, the rest of the Arab world, Israel was willing to only focus on the single issue of Palestinian statehood.

The new Lebanon proposal is a continuation of the bilateral approach. It advocates a ceasefire agreement in which the Lebanese government would rein-in Hizbullah in exchange for an end to airspace violations and negotiations over remaining occupied territory. Though Eran Etzion, the head of the Israeli foreign ministry's planning section, acknowledges this plan could only be effective following a similar agreement with Syria, he still argues that "Israel can try to advance on a separate political track with Lebanon" in the meantime. The presumed logic for this would be to progress as far as possible down the road with Lebanon while Syria was also conducting talks with Israel so that Lebanon might be persuaded to continue talks even if the Syrian track fell apart. More cynically, some could view the proposal as an alternative form of divide-and-rule, whereby the Israelis hope to further split the Lebanese by setting moderates against Hizbullah who have, unsurprisingly, already rejected the idea.

Whether part of a Syrian deal or not, the Lebanon proposal typifies the current division within the Israeli peace camp: those who favour a "Syria/Lebanon first" approach to peace, and those who advocate pushing the Palestinian track. Both groups advocate bilateralism.

Reports that Shimon Peres and now Ehud Barak have recently been promoting the multilateral 2002 Saudi peace plan are therefore quite surprising. Barak has been misquoted a little; he actually wants, "to introduce a comprehensive Israeli plan to counter the Saudi plan" rather than fully backing Riyadh's proposals. However, his renewed support for what he calls "regional peace", rather than a continued focus on the bilateral Syrian and Palestinian negotiations still represents a marked departure in Israeli diplomatic strategy.

However, the Arab world in is not what it was in 2002, and there is doubt over whether the Saudi plan could be made to work were the Israelis genuine in wanting it. One particular obstacle is the renewed cold war between Syria and Saudi Arabia – two states that would be vital players in any agreement. Even though Damascus endorsed the Saudi plan in 2007, tension is high between the two states. A proxy war is being fought between their militias in northern Lebanon and the Ba'ath regime strongly suspects Saudi-backed Islamists were the perpetrators of Damascus's recent bomb attack.

With Syrian president Bashar al-Asad's international stock seemingly on the rise, following support from Qatar, Turkey, France, he may question the merit of handing his Saudi rival the diplomatic victory of playing arbiter in any region-wide resolution. Moreover, Asad has already made clear that the key player in any negotiation will not be Saudi but rather the incoming US administration, which he hopes can provide Arab states with a substantial financial peace dividend, despite the current economic crisis.

It is with some irony, then, that if Livni (or Barak) triumphs in February, Israel might shift away from a bilateral approach at the very time when the most vocal critic of bilateralism, Syria, is seemingly changing its tune. The Syrian envoy to Washington admitted this week that disunity and lack of political coordination in negotiations with Israel was the "sad reality in the Arab world". As has been seen many times before, this disunity is allowing whoever becomes prime minister the luxury of choice in its approach to the Arab world.