Very few expected US President Barack Obama's speech to Muslims to lead to action on the Middle East so quickly. Only a week after Obama set out a whole new philosophy on how America would like to approach Muslims, George Mitchell, his special envoy to the Middle East, is already travelling in the region and looking at how to find a way forward in the Palestinian peace process.

Obama's speech included some detailed comments on Afghanistan, Iraq, Palestine and Iran, but many who have commented on it have not picked up on the many specific (and costed) promises of spending US money to support education and health, rebuild infrastructure and promote entrepreneurship and businesses.

This emphasis on soft power runs parallel with the hard military and political targets that Obama has set for his administration and its partners.

He is right to make so much of how soft power can transform a region and help a society move forward. This is why it is important that he continues to speak on education and economic development. He was direct when he said that "education and innovation will be the currency of the 21st century, and in too many Muslim communities there remains underinvestment in these areas". And he was specific when he spoke of partnership funds to support entrepreneurs and take technological developments from the Muslim world to the market.

This is a refreshing emphasis from a US president on the truly important ways that social development can take place within domestic populations, at their own pace and in their own way. Such social shifts will be more far-reaching than many of the most dramatic political initiatives that Obama will come up with during his term of office, and it is important that he was willing to spend so much of his Cairo speech talking about these plans.

Back in the political arena, Obama's straight talking on how to deal with the politics of Palestine and Israel will define the framework for his envoy Mitchell during this week's visit to the Middle East. Mitchell has said that Obama wants "immediate" Middle East talks, and he seems ready to involve all concerned. He has even gone to Syria to break the ice with the leadership there and start the process.

Mitchell has also said that the Palestinians need to "build the institutions for statehood". It is not yet clear whether this is a comment on the Palestinian National Authority's inability to govern its territory, or a call for reconciliation between Fatah and Hamas - but developments in both areas need to happen for the Palestinians to be able to play a more effective part in the forthcoming peace talks. The Fatah government has not been very effective, but the crippling split between Hamas and Fatah, combined with Hamas' grab of power in Gaza, is a real danger for the Palestinians.

Obama is clearly aware of this and would like to encourage reconciliation. To that end, his speech moved the American position on Hamas forward a lot when he recognised that "Hamas does have support among some Palestinians" and he did not condemn it outright, as his predecessor had repeatedly done.

However, Obama was unequivocal on his denial of violence as a way forward. He spelt this out very clearly when he said "Palestinians must abandon violence. Violence is a dead end. It is a sign of neither courage nor power to shoot rockets at sleeping children or blow up old women on a bus. That's not how moral authority is claimed. That's how it is surrendered".

Obama took a similar blunt line with the Israelis when he focused on the issue of colonies, saying, "The United States does not accept the legitimacy of the continued Israeli settlements [colonies]. This construction violates previous agreements and undermines efforts to achieve peace. It is time for these settlements [colonies] to stop." Obama did not make it clear whether 'stop' meant 'stop building new colonies' or 'remove the existing colonies', but the use of the word was enough to encourage Palestinians and Arabs that the new US president might be someone they could work with.

This was reinforced by Obama's statement that "the situation for the Palestinian people is intolerable. America will not turn our backs on the legitimate Palestinian aspiration for dignity, opportunity and a state of their own".

The search for peace in Palestine is important and progress towards that goal may well help redefine America's relationship with Islam, which has been dominated by unflinching US support for Israel for decades. So when Obama spoke of Islam in a tone of respect it was fascinating that this came naturally to him, without sounding forced.

His main message was that he wanted work with mainstream Islam and he refused to allow the agenda to be defined by extremists. As he put it, "the partnership between America and Islam must be based on what Islam is, and not what it isn't". Obama was talking to the vast silent majority of Muslims, who are not represented by the very few extremists or radicals.