This is an extraordinary time for the Middle East, an unprecedented one, a glorious one – and it’s passing Israel by.

Since Mubarak’s fall, we’re trying to be good sports, good losers, trying to grin and bear it, saying mabruk, congratulations, and all that. This week we’re rooting for the Iranians to knock over Ahmadinejad and the ayatollahs, but let’s face it – this is not out of love for Mordechai but out of hatred for Haman, to recall another Persian upheaval. In this little corner of the region, the atmosphere is not charged with possibility, there is no elevation of the spirit. Just the opposite: Here in what is still, but hopefully not for long, the only democracy in the Middle East, the roar for democracy echoing all around us has us scared, and the national mission now is to just try to remain calm.

It’s so sad. It’s such a waste – a waste of Israeli potential. In a Middle East that is trying to emerge into democracy, we have so damn much to offer. Everybody’s talking, rightly, about the need in the Muslim world to build the institutions of democracy – and Israel has built them. A fearless justice system. Kaleidoscopic political pluralism. Freedom of speech and press and scholarship that gets carried at times to the verge of sedition.

Public opinion in Israel has become depressingly rigid, conformist and, again, fearful; the political atmosphere can fairly be described as McCarthyite. But our democratic institutions – within the Green Line, within the sovereign, pre-Six Day War borders where Arabs are Israeli citizens, too? Strong beyond belief. A model for any country; and one that a lot of Middle Easterners, including Palestinians, admire, envy and wouldn’t mind emulating.

The political mood here may be McCarthyite, but Israel is so far from being a fascist state, its democratic institutions are so powerful that it amazes me.

Israelis worship the military, they idolize generals, which is bad. We should idolize generals a little less and hospital directors, for instance, a little more. But look at what just happened to the would-be general number one, Yoav Galant, when he ran up against Israeli democracy. This was unbelievable – an incoming IDF chief of General Staff was barred from assuming the post on ethical grounds because the attorneygeneral, with the expected backing of the Supreme Court, decided he’d been less than upright and honest about a minor moshav land dispute.

Even if you think the legal establishment went overboard on Galant – and I think it might have – you have to be in awe of the power of the Israeli justice system, that it prevailed with the stroke of a pen over the army and government in such a high-stakes battle.

That’s democracy, folks. That sort of thing doesn’t happen in a fascist state or military dictatorship.

And very soon, the betting is that the justice system will indict the foreign minister, the rising power in Israeli politics, our wannabe fascist leader, Avigdor Lieberman, for felonies such as bribery and fraud. He has already been recommended for indictment by the police department, which investigated him for more than a decade.

Only in a democracy.

And only in a democracy could elected representatives of an unpopular, even hated national minority stand up in parliament and scream “fascist!” at elected representatives of the majority.

IT’S STAGGERING. Within the Green Line, this is such an incredibly free country with such an unshakeable rule of law. What’s more, it offers a tremendous amount of economic opportunity, which is the other thing, besides democracy, that the Arabs in the streets these days are demanding.

And yet this great, miraculous moment in Middle East history is passing Israel by.

Why? Because beyond the Green Line, Israel is not a democracy, it’s a military dictatorship over millions of Palestinian Arabs, and the Arabs of the region, understandably, are a little more struck by that than they are by our Supreme Court.

And beyond the occupation of the West Bank and blockade of Gaza, we behave like the regional hegemon, sending bomber squadrons to enforce our imagined exclusive right to nuclear weapons, flying spy planes over Lebanon every week, boarding a Turkish aid ship to Gaza in international waters.

All the while, we just can’t understand why the neighbors complain, except, of course, that they hate Jews.

And a lot of them do, and probably always will, no matter what Israel does, good or bad. But I believe that most Muslims in the Middle East really have other things on their minds than hatred of Jews, or hatred of Israel. If we stopped throwing our weight around, if we went back to living within our rightful borders, if we realized we had the power to live as equals in the neighborhood and weren’t driven by insecurity to try to survive as a bully, this Jewish, democratic state might have a role in a democratic Middle East.

I didn’t believe that before the Egyptian uprising. Before these last three weeks, or, rather, between the end of the peace process in October 2000 and these last three weeks, the best I thought Israel would ever be able to do would be to live as a secure fortress in a desert of malice – to achieve a de facto state of nonbelligerency via military deterrence.

But now I think there’s a possibility to do better than that – not a certainty, not a likelihood, either, and at any rate not soon – but a genuine possibility to break down these walls of mutual ignorance, fear and hostility between us and the Muslim world.

What’s happening beyond our borders is without precedent. If the Arabs keep going for democracy and modernity, they will be coming into the world we’re already part of. In a sense, they will be integrating with us, and if they do, I know that Israelis are going to want to integrate with them – as separate, sovereign nations, but nations that can talk to each other.

And if the topics are freedom and progress – the ones Muslims are literally dying to talk about today – we are going to have a great deal to say to them.

But first we have to loosen our fist. We have to lead with Israeli democracy, not Israeli dictatorship, not Israeli hegemony. We have to turn this country inside out. If we do that, and if this Muslim renaissance continues, then anything is possible.

It was a Zionist, after all, who said, “If you will it, it is no dream.”