The Obama administration’s options on a major foreign policy issue, the Arab-Israeli peace process, range from bad to worse.

Those options mirror the choices contained in a semi-mythic State Department memo, which lives on in the hearts of all of us who served the interests of the Republic there: option #1 go for the breakthrough; option #2 disengage, and the infamous option #3 – muddle through.

Looking at the realities in the Arab-Israeli arena and the Obama administration’s false starts these past 20 months, it should be clear to all but the interminably obtuse that the breakthrough option is likely to fail now. Walking away isn’t possible or desirable either.

So that leaves No. 3: muddle through. While this has its downsides – U.S. credibility will suffer and violence will follow — if you’re not moving forward, you’re moving backward. A rush to an ill-prepared breakthrough – for example, an American plan — will produce the same effect, as the failed 2000 Camp David summit reminds us.

The smart money in the Obama administration is on muddle through. Here’s why:

First, the Israeli -Palestinian peace process, even under the best of circumstances, isn’t ready for prime time. Neither Israeli Prime Minister Benjamin Netanyahu nor Palestinian President Mahmoud Abbas own it. And ownership — the need to make decisions because pain and the prospects of gain impel you to — isn’t present.

Yes, the status quo is bad, particularly for Palestinians. But that doesn’t mean the risks of changing it — and making big decisions on existential issues like Jerusalem, borders and refugees — isn’t more dangerous to many politicians, who are likely to be held accountable if they give or demand too much.

Second, the cooler heads in the Obama administration know this. Particularly the secretary of state, Hillary Clinton, and the new national security adviser, Tom Donilon. Unless something turns up to change local calculations – and manufacturing that something in Washington is risky — this will fail. And yes, while President Bill Clinton told us shortly before Camp David that trying and failing is better than not trying at all, the current secretary of state is a lot smarter than that. Particularly given the fact that she could well be in the middle of the failure.

Third, governing is about choosing. This president needs to pick his issues and fights carefully. Not just because, within 20 months, his name will be on the ballot. But because he has many priorities — both domestic and foreign — to manage. High-risk propositions will not help him.

If he pushes for a high-risk breakthrough on the Israeli-Palestinian track, Obama will not only risk failure. He is likely to find himself embroiled with House Republicans and the U.S. pro-Israeli community in a costly fight

And for what? An agreement he’s unlikely to achieve. Those constituencies are already suspicious that he isn’t the friend of Israel he claims to be. They’re unlikely to give him the benefit of the doubt.

Muddle through is usually given a bad name — particularly by the energizer bunnies of U.S. diplomacy who want engagement and solutions. But under current circumstances, it may not be such a bad idea.

The Obama administration should stop beating itself up over the absence of grand bargains and breakthroughs and move in four different — but complimentary – directions managed carefully by the Secretary of State:

First, stay out of the United Nations. Don’t encourage the Palestinians to believe that the United States will vote for, or even abstain on, resolutions that criticize the Israelis on settlements. Or support efforts to recognize Palestinian statehood. It’s a key to an empty room. That will come only through negotiations and U.S. mediation in the region — not in New York.

Second, support Palestinian Prime Minister Salam Fayyad’s institution building on the West Bank, especially in the economic and security areas;

Third, use the absence of direct talks — which have rarely produced sustained breakthroughs in any case — to press both sides separately, at a high level, on where they are on the core issues. Do this for three months — and see where the gaps are and what the chances are fro bridging them;

Fourth, probe for signs of life on the Israeli-Syrian talks. On paper, negotiations over the Golan Heights are easier and track more closely with the administration’s strategy on containing and changing Iranian behavior.

Above all, keep the game alive, and the illusion (for the moment ) that Washington has the capacity to deliver a solution. This president may get two terms; don’t rush to judgemnt on an issue that isn’t ready for it and reveal that the emperor has no clothes.

It’s not pretty, but it’s necessary. And you know what? Something may just turn up that will not only give the Israelis and Palestinians the incentive to do some serious business on Israeli-Palestinian peacemaking, it may give President Barack Obama a chance to really earn his Nobel peace prize.

Aaron David Miller, a former Middle East negotiator for Republican and Democratic administrations, is a public policy scholar at the Woodrow Wilson International Center for Scholars.