HERE is the bad news: the Old Peace is dead.

It was first wounded in 1994 when, a year after the Oslo accords, Israel let Yasir Arafat, the leader of the Palestine Liberation Organization, return to the West Bank, and a result was a deadly bus bombing in central Tel Aviv.

The Old Peace was injured again in 2000, when, at a Camp David summit meeting, Israel agreed to establish a free Palestinian state in Gaza and in nearly 90 percent of the West Bank, and Mr. Arafat refused. The outcome? The second intifada, with its suicide bombings and the loss of more than 1,000 Israeli lives, left the people of Israel again traumatized.

The third blow came in 2005, when Israel pulled out of the Gaza Strip and the response was not the emergence of a prosperous, self-governing Palestinian territory, but the establishment of a Hamas-controlled rocket base that has periodically terrorized southern Israel.

The death knell for the Old Peace finally sounded in December 2010, with the start of the Arab awakening, which toppled secular dictators like Zine el-Abidine Ben Ali in Tunisia, Hosni Mubarak in Egypt and Muammar el-Qaddafi in Libya, while turning Bashar al-Assad’s Syria into a ghastly slaughterhouse. Corrupt yet stable tyrannies, which had supported a fragile peace with Israel, have been replaced by nascent Islamist republics and failed or failing states.

In these new circumstances, no Arab leader has the legitimacy needed to negotiate a lasting peace; no Arab government can be trusted to enforce it; and Israelis justifiably feel there is no reliable Palestinian partner who can guarantee it. The Old Peace, the dream of numerous direct talks from 1991 through 2010, died in the caldron of the Arab Spring.

But here is the good news: a New Peace is now a promising option. Having brought down tyrants who had paralyzed public life and public debate for decades, the peoples of the Arab world are focusing on the internal problems of their societies: poverty, corruption, lack of freedom and opportunity and an overall failure to establish a decent, functioning Arab modernity.

At the same time, an Israeli social justice protest movement that began in the summer of 2011 — filling the streets of Tel Aviv’s Rothschild Boulevard and then quickly spreading to mass demonstrations across the country — is quietly changing the political system. It has placed major pressure on the right-wing government of Prime Minister Benjamin Netanyahu and helped account for the January elections, in which the party of the television host-turned-politician Yair Lapid came in a surprising second.

Israelis are also focusing on their internal malaise: a dysfunctional government; a financial oligarchy; rising inequality, cost of living and pressure on the middle class; poor public education; and the disproportionate power wielded by ultrareligious parties — adding up to a failure to construct a functioning Israel that truly represents its citizens and provides for their needs.

Make no mistake: Arab and Israeli social conditions are not at all identical. Egypt remains an oppressive, developing society reliant on American aid, while Israel is a thriving, high-tech democracy. But there is an intriguing link between the Arab Spring sweeping the Middle East and the protest movement changing the face of the Jewish state. As both Arabs and Israelis look inward, the Old Peace is dead, but a New Peace might be born.

The New Peace will be very different from the Old Peace. There will not be grandiose peace ceremonies in Camp David or at the White House, no Nobel Prizes to be handed out. The New Peace does not mean lofty declarations and presumptuous vows, but a pragmatic, gradual process whereby the New Arabs and the New Israelis will acknowledge their mutual needs and interests. It will be a quiet, almost invisible, process that will allow Turks, Egyptians, Saudis, Jordanians, Syrians, Lebanese, Palestinians and Israelis to reach common understandings. The New Peace will be based on the humble, pragmatic assumption that all the participants must respect, and not provoke, one another, so that conflict does not disrupt the constructive social reforms that all seek to promote.

New Peace might have all sorts of manifestations. A real Israeli settlement freeze in the West Bank rather than a romantic Israeli-Palestinian final status agreement which is not feasible at the moment. An Israeli-Egyptian water-supply development project that would reinforce the fragile peace between the countries. An Israeli-Turkish gas deal that would bring together two of America’s most reliable allies and encourage them to work as regional stabilizers. A Saudi-Israeli-Palestinian program that would channel some of the riches of the Persian Gulf to keep the peace in Palestine. A secret Israeli-Hamas deal that would give Gaza more autonomy and prosperity while halting its rearmament.

Mr. Obama’s strategy must focus on designing and fostering initiatives like these. The United States alone can orchestrate this kind of regional cooperation. Its aim should be to prevent nationalistic crises and religious eruptions from endangering a new, tentative promise: Israelis and Arabs rebuilding their nation-states while creating healthy, middle-class societies.

As Israel forms a new government, it needs a new strategic concept toward the Palestinians. The Arab world needs new organizing principles for its fledgling states. And America needs a new Middle East vision — one aimed not at grand and unattainable all-encompassing solutions but at incremental steps to temper the flames of extremism, tribalism and hate.