Israel can no longer expect "blank cheques" from Washington once president-elect Barack Obama's administration takes over in January, a former US ambassador to the Jewish state said on Sunday.

"The era of the blank cheque is over," said Martin Indyk, director of the Centre for Middle East Policy at the Brookings Institute who is considered close to incoming secretary of state Hillary Clinton.

"The Obama administration intends to be engaged, using diplomacy to try to bring about a safer and more peaceful place, that is different from the seven years of the (George W.) Bush administration," he said on public radio.

"President Obama surely will want to work with Israel on this (Middle East) agenda. But there are obligations on both sides (Israel and the Arabs). Both sides will have to respect these obligations," Indyk said.

Acting Prime Minister Ehud Olmert held a "long conversation" with Clinton earlier this week and welcomed her nomination in Obama's team, his office said. She vowed to work for peace and stability in the Middle East.