After 20 months, Barack Obama's administration may be close to injecting some much-needed stability into the on-again, off-again Israeli-Palestinian peace process. The deal concluded last week in New York between Secretary of State Hillary Clinton and Prime Minister Benjamin Netanyahu -- if it gets through the Israeli cabinet and the Palestinians -- should allow the negotiations to resume in the wake of a three-month moratorium on settlements. But as I've written before, the administration shouldn't pray for anything it really doesn't want and isn't prepared for. The upcoming challenges will severely test a president and secretary of state who badly need a foreign-policy success.

First, the good news. Any advance in the excruciatingly painful world of Arab-Israeli negotiations is significant. The Obama administration deserves much credit for keeping the Israelis, Palestinians, and key Arab states on board during some very tough times. The U.S. president has seized on this issue and isn't giving up -- a central requirement for success.

The extension of the settlement moratorium will allow the administration to shift focus from settlements (where it had no chance to succeed) to the substance of the negotiations (where it must go if it wants an Israeli-Palestinian agreement). And make no mistake, an agreement on borders and security would be a huge success in the negotiations and restore faith in both the credibility of the negotiating process and in America's diplomatic skills.

That the secretary of state is deeply enmeshed in brokering this deal is also significant. Hopefully, she will invest even more time in the negotiations and correct the bureaucratic anomaly that has characterized the administration's envoy-centric approach. Only the secretary has the power and the time to do heavy lifting -- not just with the Israelis and the Palestinians, but with the president. Over the next three months, Clinton must become the desk officer for the Israeli-Palestinian negotiations, with the president brought in at critical times.

Now, the bad news. Let's skip over the fact that the administration has generously rewarded the Israelis with military hardware and political guarantees for something (settlements) they shouldn't have been doing in the first place, or that the president is paying a steep price just for getting talks started again. We have to hope that there are additional substantive understandings reached that will secure the talks beyond the three-month moratorium.

Beyond these problems, there are additional challenges. First, the administration will be under enormous pressure to broker an agreement on borders and security within three months, or at least make enough progress to ensure that both sides have a stake in continuing. A rapidly ticking clock can be a catalyst if the issues on the table aren't consequential ones; if they are, time can work as an enemy, not an ally. Israelis and Palestinians don't want to be rushed into making mistakes or concessions on core issues. In fact, it is in their interest to drag matters out to show their constituents how tough they've been in the negotiations.

Borders may be easier then refugees, but getting the Israeli government and the Palestinian Authority to agree on the only realistic two-state solution possible -- the June 1967 lines with land swaps and settlement blocs to accommodate Palestinian and Israeli needs -- will be very hard. It may require a new Israeli government more capable of compromise, along with the delays and deals that Israeli domestic politics require. With 32 governments since Israel declared independence in 1948 and the average length of each government about 1.8 years, this is no small matter in a negotiation in which continuity is critical. Then there's the pesky problem of what kind of benefits and goodies the Palestinians will demand to make it easier for them to return to the table.

What's even more troubling is Jerusalem, where the Israeli government will continue to build and expand Jewish neighborhoods, presumably with U.S. acquiescence. Jerusalem is not just an identity issue for both sides, each of which sees the city as its historical capital and spiritual center, but also a territorial one. Can you define the final borders of a Palestinian state without defining the borders of Jerusalem? It's hard to imagine. Even if the Palestinians wanted to finesse the Jerusalem issue, they may have no choice but to push it hard because the Israelis will continue to build there during the negotiations. So, the administration has bought itself a high-wire act early on. If there is a deal breaker, Jerusalem is it.

Having set a high bar early in his administration, there is no doubt the president intended to be the architect of a Palestinian state. He remains outwardly committed, but whether he still feels this way in the wake of the midterm election, a jobless recovery, and myriad other headaches much more important to his re-election than Palestinian statehood is anybody's guess. As he looks for possible foreign-policy successes, he does confront an interesting fact: The Israeli-Palestinian issue is probably the least hopeless challenge he faces in the broader Middle East -- a stunning reminder of the cruel and unforgiving world he now inhabits with Afghanistan, Iran, Iraq, and transnational terrorism all posing serious dangers.

There is no telling now whether Obama and his team will be able to facilitate, let alone deliver, an Israeli-Palestinian agreement. But one thing is unmistakably clear: If the president really wants to be the father of a Palestinian state, he is going to have to throw an unbelievable amount of time, energy, and political capital at the problem. And he is going to have to have a clear strategy for setting up decision points for Israelis and Palestinians along the way. This will require toughness and reassurance -- not just honey, but vinegar too. Obama has already received his Nobel Peace Prize; the time to earn it may be just around the corner.