The Arab world was generally anxious that President Barack Obama would retreat from his view, reiterated recently by several of his key officials, that a Palestinian-Israel settlement merits top and immediate attention, especially from Israel. But the fact that he did not in his talks last Monday with the hawkish Israeli Prime Minister, Benjamin Netanyahu, and had actually stressed the need for several more positive steps, was generally well-received in the Arab world.

The meeting at the White House, which included a lengthy face-to-face session between the two leaders, was memorable for the unprecedented verbal exchanges that followed and facial expressions recorded by the media between a serious-looking Obama and a sometimes-smiling Bibi. They probably replicated what took place behind the closed doors.

Obama stuck to his guns. "I have said before and I will repeat again that it is, I believe, in the interest not only of the Palestinians, but also the Israelis and the United States and the international community to achieve a two-state solution in which Israelis and Palestinians are living side by side in peace and security."

Turning his face to Netanyahu, he added, "I suggested to the Prime Minister that he has an historic opportunity to get a serious movement on this issue during his tenure," adding at another point "the United States is going to do everything we can to be constructive, effective partners in this process".

The Israeli prime minister promised to start peace negotiations "immediately", stressing that "we don't want to govern the Palestinians". However, he failed to reiterate a previous Israeli commitment to a two-state solution and added a controversial condition: "the Palestinians will have to recognise Israel as a Jewish state" despite the fact that a fifth of the country is inhabited by Palestinians in the 1948 areas.

Two other "additional steps" that Obama stressed are crucial for Israel to take: Israeli colonies in the occupied Palestinian territories "have to be stopped in order for us to move forward", a condition the Palestinians have recently voiced before they can resume negotiations with the Tel Aviv government. Obama also pointed out that the "humanitarian situation" in Gaza has to be addressed. This was the first time the president had some compassionate words for Palestinians in the congested coastal strip who suffered following the three-week Israeli invasion last January.

Obama underlined, "If the people of Gaza have no hope, if they can't even get clean water at this point, if the border closures are so tight that it is impossible for reconstruction and humanitarian efforts to take place, then that is not going to be a recipe for Israel's long-term security or a constructive peace track to move forward."

Even on Iran, the two leaders had different approaches, with the American preferring to settle the Palestinian-Israel conflict in order to pull the carpet from underneath the Iranians. His argument: "To the extent that we can make peace with the Palestinians - between the Palestinians and the Israelis, then I actually think it strengthens our hand in the international community in dealing with a potential Iranian threat ... We have to move aggressively on both fronts."

The bottom line is that neither Obama nor Netanyahu has abandoned his position, although both showered each other with high-sounding praise. Obama talked about the "extraordinary relationship [with Israel], the special relationship ...the stalwart ally ... the historical ties, emotional ties [and] the only democracy of the Middle East ... a source of admiration and inspiration for the American people." In turn, Netanyahu thanked Obama for his friendship to Israel "and your friendship to me", describing him as "a great leader of the United States, a great leader of the world, a great friend of Israel" and his "reaffirmation of the special reaffirmation between Israel and the United States".

In the concluding minutes, Iran's nuclear ambitions and threats to Israel was aired again, the Israeli leader claimed that he and Obama "see exactly eye to eye on this - that we want to move simultaneously and then parallel on the two fronts: the front of peace, and the front of preventing Iran from acquiring nuclear capability".

Obviously Obama did not share his guest's views. For example, once again, Netanyahu, wearing a veiled smile, concluded his remarks by expressing his readiness to begin negotiations with the Palestinians if - a big if - they recognise Israel as the Jewish state and, lo and behold, "if they fight terror, if they educate their children for peace and to a better future".

There is no doubt that the ball remains in Obama's court; and Netanyahu, who returns home virtually empty handed, would do better if he were to do some serious rethinking before his host's upcoming trip to Egypt next month for a major address to the Muslim world where he will most probably spell out in more detail the new American approach in the Middle East. We all remember what happened to Netanyahu after he lost his stature at home following his confrontation with president Bill Clinton.

Obama should realise that if he has any hopes of fulfilling his dream in the Middle East, he would need to exercise some arm-twisting, sooner rather than later.

Simultaneously, the Palestinians, who remain disappointingly split, should work on putting their house in order lest they once again face another period of US disengagement as was the case during the administration of George W. Bush, who neglected them for seven fruitless years.