The American government’s decision to change its approach to mediating an Arab-Israeli comprehensive peace agreement, by dropping its insistence on an Israeli freeze in settlement construction as a prerequisite for moving ahead, confirms several important things. It proves that the US can be decisive, persistent, realistic, patient, pragmatic and humble - all admirable and important qualities in a mediator. The problem is that the US has proved again that the most important attribute for a mediator is the one it has never mastered in recent years: success.

The last two years of Washington’s dramatic, persistent and sometimes aggressive Middle East mediation suggests Obama will continue to commit American diplomatic assets to this issue. His dilemma is that what started out as a desire to mediate Palestinian-Israeli peace has proven to be an exercise in American-Israeli political arm twisting - and the Israelis have won the first two rounds. He got only a partial freeze from the Israeli government on most housing construction for ten months in all areas except Jerusalem, when he had demanded a total settlements freeze - but this was sufficient to launch indirect and then direct negotiations between Israelis and Palestinians.

When the time came to renew the freeze the Israelis stood their ground and the Obama team could not budge them, even when it tried to bribe Israel with multi-billion dollar incentives of arms, money and diplomatic support. Obama finally threw in the towel and surrendered to reality: the US in the present circumstances cannot get Israel to abide by international law and UN demands by freezing settlements for a significant period of time. It turned out that, indeed, the US wants a resolution of this conflict more than the parties themselves, for now at least.

The US is not giving up, though. Secretary of State Hillary Clinton confirmed this in a speech Friday in which she indicated little beyond the fact that the future will look much like the past for the time being: George Mitchell will continue to shuttle between Israeli and Palestinian leaders who seem unwilling or unable to make the tough decisions needed to end Israeli occupation and colonisation and achieve a full peace agreement. Obama will still face the same key dilemma that bedevils him: Israel dictates to the US in this realm more than the US dictates to Israel. Obama also enters the next phase of this saga in a politically weakened state, having suffered a defeat in the US mid-term congressional elections, as the Republicans now control the House of Representatives.

This is significant because pro-Israeli forces and lobbies in Washington work primarily through the Congress, and not directly on the White House. A new poll this week by the Brookings Institution, coordinated by University of Maryland professor Shibley Telhami, shows that nearly three out of four Americans (71 per cent) want the US to keep mediating peace in the Middle East, and two-thirds of Americans believe the Arab-Israeli issue is among the top five American interests - suggesting that Obama has widespread support for his activist mediation policy. Yet the poll also showed that 46 per cent of Republicans want American diplomacy to lean toward Israel (vs. only 11 per cent of independents and 14 per cent of Democrats). This could limit Obama’s ability to mediate peace, given the lesson he has just learned that American mediation is really mostly a tale of political arm wrestling with Israel.

The strategy most likely to have a chance of success is the riskiest for Obama: stand above the squabbling Israelis and Palestinians for a moment, go over the head of Israeli proxies and lobbyists in Washington, neutralise the pro-Israeli zealots in the US government, chart out a daring peace-making roadmap and end game that respond to both Israeli and Arab rights in a reasonable manner, and harness the support for this that exists among that majority of Americans that approves of even-handed and activist American mediation in the Middle East. Clinton hinted slyly Friday that elements of such an approach are likely in the form of the US offering its own ideas and bridging proposals, and, more importantly, that US mediation would aim to address the big, core issues like settlements, borders, refugees, water and Jerusalem, rather than keep being diverted by issues like the settlements freeze that falls well short of a final status core issue.

A bold, equitable and internationally supported American move in this respect, clearly desired by a majority of Americans, could prod the protagonists in the Middle East to negotiate more seriously. Now is the time for the US government and President Obama to show that along with being decisive, persistent, realistic, patient, pragmatic and humble, they can also be even-handed and successful in mediating Arab-Israeli peace. The first thing they have to decide is whether they are mediating Arab-Israeli peace or negotiating American-Israeli domestic politics. The two are not synonymous.