In speech after spell-binding speech, Barack Obama made clear throughout his campaign his intention to restore America’s reputation in the world; that, as he told the vast crowd at his Chicago victory rally, “America’s beacon still burns as bright”. In the Middle East and throughout broad swathes of the Muslim world, that beacon is invisible after eight years of the Bush administration’s bungling. President-elect Obama has a unique chance to rekindle it.

He should signal his intent by naming soon a special envoy for the Middle East with plenipotentiary powers to mediate and negotiate on behalf of his incoming administration. That would be change and it would quickly be perceived as such. Bill Clinton, the former president, is probably the best man for the job.

The debacles of the Bush era, from the invasion of Iraq, through the reckless Anglo-American support of Israel’s 2006 Lebanon war, to the US adoption of an attitude rather than a policy towards Iran, have created a dangerous political vacuum in the region. True, the past year has seen limited conflict resolution managed by Qatar, Saudi Arabia, Egypt and Turkey. While all this should be viewed positively as “local ownership” of regional strategic problems, these efforts may turn out to be band-aids.

The US really is indispensable to the resolution of the region’s most intractable problems – as long as it rediscovers the transformative power of hard-nosed diplomacy.

That means an even-handed final effort to secure a two-states solution offering security to Israelis and justice to the Palestinians. And that can only be obtained through the creation of a viable Palestinian state on nearly all the occupied West Bank with Arab east Jerusalem as its capital, with agreed and equal land swaps, and fair treatment for 4.4m Palestinian refugees, largely through compensation.

That is the essence of the 2002 Arab League peace plan put forward by King Abdullah – who will be in New York and Washington next week with a top-level Saudi delegation – as well as the “parameters” drawn up by Mr Clinton in December 2000, after the collapse of that summer’s Camp David summit.

The Obama team should make clear now that this is also its vision of how to resolve this conflict, at the heart of the region’s combustibility. It might even tilt Israeli voters towards the peace camp in February’s elections. They did, after all, throw out the irredentist Yitzhak Shamir in 1992 after he incurred the displeasure of George H.W. Bush. Yitzhak Rabin, the slain peacemaker, was elected in his stead.