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In Nu'man, one of the villages the UN says is "living in limbo", the situation is particularly dire. The village is surrounded on three sides by Israel's West Bank barrier and on another by the Israeli settlement of Har Homa. The village entrance is blocked by an Israeli checkpoint to anyone other than Nu'man residents. Permits are not given for new homes in the village, and the younger generation is being forced out. Israel annexed Nu'man to Jerusalem after the 1967 war, but never gave its people Jerusalem residency.

Israel's hardline foreign minister, ­Avigdor Lieberman, lives in Nokdim, one of the Jewish settlements in the Beth­lehem area, some way to the east of Israel's barrier.

In what appears to be a concession to win Labour's support, he and Barak agreed a joint platform that would commit the new government to working for a "comprehensive regional agreement for peace and co-operation in the Middle East", according to the Israeli press.Though that platform says the new government will work towards peace with its neighbours and will respect Israel's international agreements, there was no explicit mention of the creation of an independent Palestine.

Binyamin Netanyahu, head of the right-wing Likud party, will be prime minister and possibly finance minister.• Avigdor Lieberman, the far-right head of the Israel Our Home party, who campaigned in favour of a law demanding all Israel's Arabs swear an oath of loyalty to the country as a Jewish state, will be foreign minister.• Ehud Barak (below), head of the Labour party, who last month seemed resigned to going into opposition, will stay on as defence minister.• Eli Yishai, the head of the ultra-Orthodox Shas party, will be interior minister.

Last week, the Economist called for the United States to reduce its aid to Israel if the Netanyahu government continues to reject a two-state solution.  The Boston Globe offered a similar view earlier this week, advising Obama to tell Netanyahu "to take the steps necessary for peace or risk compromising Israel's special relationship with America." A few days ago, Ha’aretz reported that the Obama Administration was preparing Congressional leaders for a possible confrontation with the Netanyahu government.

We already know what it means for the United States to put pressure on the Palestinians, because Washington has done that repeatedly -- and sometimes effectively -- over the past several decades.  During the 1970s, for example, the United States supported King Hussein’s violent crackdown on the PLO cadres who were threatening his rule in Jordan. During the 1980s, the United States refused to recognize the PLO until it accepted Israel’s right to exist.  After the outbreak of the Second Intifada, the Bush administration refused to deal with Yasser Arafat and pushed hard for his replacement. After Arafat's death, we insisted on democratic elections for a new Palestinian assembly and then rejected the results when Hamas won. The United States has also gone after charitable organizations with ties to Hamas and backed Israel’s recent campaign in Gaza.

In short, the United States has rarely hesitated to use its leverage to try to shape Palestinian behavior, even if some of these efforts -- such as the inept attempt to foment a Fatah coup against Hamas in 2007 -- have backfired.

The United States has only rarely put (mild) pressure on Israel in recent decades (and never for very long), even when the Israeli government was engaged in actions (such as building settlements) that the U.S. government opposed.  The question is: if the Netanyahu/Lieberman government remains intransigent, what should Obama do?

4. Downgrade existing arrangements for “strategic cooperation.”  There are now a number of institutionalized arrangements for security cooperation between the Pentagon and the Israel Defense Forces and between U.S. and Israeli intelligence. The Obama administration could postpone or suspend some of these meetings, or start sending lower-grade representatives to them.

2. Change the Rhetoric. The Obama administration could begin by using different language to describe certain Israeli policies.  While reaffirming America’s commitment to Israel’s existence as a Jewish-majority state, it could stop referring to settlement construction as “unhelpful,” a word that makes U.S. diplomats sound timid and mealy-mouthed.  Instead, we could start describing the settlements as “illegal” or as “violations of international law.”

U.S. officials could even describe Israel’s occupation as “contrary to democracy,” “unwise,” “cruel,” or “unjust.”  Altering the rhetoric would send a clear signal to the Israeli government and its citizens that their government’s opposition to a two-state solution was jeopardizing the special relationship.

3. Support a U.N. Resolution Condemning the Occupation.  Since 1972, the United States has vetoed forty-three U.N. Security Council resolutions that were critical of Israel (a number greater than the sum of all vetoes cast by the other permanent members)

If the Obama administration wanted to send a clear signal that it was unhappy with Israel’s actions, it could sponsor a resolution condemning the occupation and calling for a two-state solution.

1. Cut the aid package? If you add it all up, Israel gets over $3 billion in U.S. economic and military aid each year, which works out to about $500 per Israeli citizen. There’s a lot of potential leverage here, but it’s probably not the best stick to use, at least not at first. Trying to trim or cut the aid package will trigger an open and undoubtedly ugly confrontation in Congress (where the influence of AIPAC and other hard-line groups in the Israel lobby is greatest). So that’s not where I’d start.

There is in fact a precedent for this step: after negotiating the original agreements for a “strategic partnership,” the Reagan administration suspended them following Israel’s invasion of Lebanon in 1982. Today, such a step would surely get the attention of Israel’s security establishment.

5. Reduce U.S. purchases of Israeli military equipment. In addition to providing Israel with military assistance (some of which is then used to purchase U.S. arms), the Pentagon also buys millions of dollars of weaponry and other services from Israel’s own defense industry. Obama could instruct Secretary of Defense Robert Gates to slow or decrease these purchases, which would send an unmistakable signal that it was no longer "business-as-usual." Given the battering Israel’s economy has taken in the current global recession, this step would get noticed too.

6. Get tough with private organizations that support settlement activity. As David Ignatius recently noted in the Washington Post, many private donations to charitable organizations operating in Israel are tax-deductible in the United States, including private donations that support settlement activity. This makes no sense: it means the American taxpayer is indirectly subsidizing activities that are contrary to stated U.S. policy and that actually threaten Israel’s long-term future.  Just as the United States has gone after charitable contributions flowing to terrorist organizations, the U.S. Treasury could crack down on charitable organizations (including those of some prominent Christian Zionists) that are supporting these illegal activities. 

7. Place more limits on U.S. loan guarantees. The United States has provided billions of dollars of loan guarantees to Israel on several occasions, which enabled Israel to borrow money from commercial banks at lower interest rates.  Back in 1992, the first Bush administration held up nearly $10 billion in guarantees until Israel agreed to halt settlement construction and attend the Madrid peace conference, and the dispute helped undermine the hard-line Likud government of Yitzhak Shamir and bring Yitzhak Rabin to power, which in turn made the historic Oslo Agreement possible.

8. Encourage other U.S. allies to use their influence too. In the past, the United States has often pressed other states to upgrade their own ties with Israel.  If pressure is needed, however, the United States could try a different tack.  For example, we could quietly encourage the EU not to upgrade its relations with Israel until it had agreed to end the occupation.

most of these measures could be implemented by the Executive Branch alone, thereby outflanking die-hard defenders of the special relationship in Congress.  Indeed, even hinting that it was thinking about some of these measures would probably get Netanyahu to start reconsidering his position.

Most importantly, Obama and his aides will need to reach out to Israel’s supporters in the United States, and make it clear to them that pressing Israel to end the occupation is essential for Israel’s long-term survival.

He will have to work with the more far-sighted elements in the pro-Israel community -- including groups like J Street, the Israel Policy Forum, Brit Tzedek v'Shalom,  and others

In effect, the United States would be giving Israel a choice: it can end its self-defeating occupation of Palestinian lands, actively work for a two-state solution, and thereby remain a cherished American ally.  Or it can continue to expand the occupation and face a progressive loss of American support as well as the costly and corrupting burden of ruling millions of Palestinians by force.

Indeed, that is why many—though of course not all--Israelis would probably welcome a more active and evenhanded U.S. role. It was former Prime Minister Ehud Olmert who said "if the two-state solution collapses, Israel will face a South-Africa style struggle for political rights." And once that happens, he warned, “the state of Israel is finished."

The editor of Ha’aretz, David Landau, conveyed much the same sentiment last September when he told former Secretary of State Condoleezza Rice that the United States should "rape" Israel in order to force a solution. Landau's phrase was shocking and offensive, but it underscored the sense of urgency felt within some segments of the Israeli body politic.

the degrading and disrespectful nature of Netanyahu's remarks. That's not how one brings down a wall of enmity between two nations, that's not how trust is built.

Iran is not simply a medium-sized regional power that can be ordered around at will. Ironically, America's disastrous war in Iraq has allowed its fierce adversaries in Tehran to benefit from a massive shift of power in the Middle East.

Before his ascent to the office of president, not even diplomats stationed in Tehran and familiar with all of the ins and outs of Iranian politics were familiar with this short man with the sparse beard and piercing eyes. The fiery revolutionary, hardworking to the point of exhaustion and filled with contempt for earthly wealth, rose to power from humble beginnings and became the hope of all "Mostasafin," the disenfranchised millions without whom the Islamic Republic probably would not exist today and for whom Ahmadinejad has fashioned himself into an Iranian Robin Hood.

This places the Americans before the virtually impossible task of joining forces with Iran to resolve the classic Middle East conflict and its 30-year conflict with Tehran itself. For this reason, the Iraq question is also becoming increasingly urgent for Washington.

Obama knows that the United States could derive substantial benefits from cooperation with Tehran. Without Iran, for example, it will be almost impossible to bring peace to Afghanistan in the long term. In Afghanistan and Pakistan -- the center of conflict that Washington describes in its new strategic concept as a single unit known as "AfPak" -- the Americans and Shiite Iran have many interests in common. Tehran's rulers battled the Sunni Taliban radicals, whom they have always seen as dangerous neighbors and ideological foes, before the Americans did.

And Tehran, with the world's second-largest natural gas reserves and its third-largest oil reserves, has the capacity to do a great deal of damage to the international economy -- or help it overcome the global economic crisis.

Conversely, rapprochement with the United States and Europe would also bring enormous benefits to the Iranians. Without know-how from the West, the country will hardly manage to achieve the modernization it needs so urgently. With inflation approaching 30 percent and real unemployment exceeding 20 percent (12 percent, according to official figures), and more than a million drug addicts -- a distressing world record of addiction -- the country faces practically insurmountable problems.

Whether the internally divided Palestinians will manage to come to terms and form a unified government for the Gaza Strip and the West Bank is no longer in the hands of the inconsequential negotiators in Cairo, but will be decided instead by Hamas's patrons in Tehran. Tehran also decides whether the Lebanese Hezbollah or Hamas's extremists use primarily words to express their hostility toward Israel or, as is currently the case, resume their bloody terrorist attacks instead.

Ahmadinejad feels obligated to the permanently downtrodden members of society. As if he were one of them, he campaigned for president four years ago in Tehran's massive poor neighborhoods, traveled to the country's most remote places and promised the underprivileged their share of Iran's riches. He told them that he would fill their empty plates with the proceeds from the sale of oil, and that he would declare war on corruption and nepotism. The "era of oppression, hegemonic regimes, tyranny and injustice has reached its end," Ahmadinejad told supporters after his election.

But the political achievements of President Ahmadinejad have been more miserable than stellar. In addition to isolating his country even further in the world, he has ruined its economy with his chaotic economic policies. In the devastating assessment of Ali Larijani, the president of the Iranian parliament and Ahmadinejad's biggest domestic rival, whom he previously removed from his position as Iran's chief nuclear negotiator with the West: "The confusion is the result of the government arbitrarily dissolving offices and dismissing experts, ignoring parliamentary resolutions and stubbornly going its own way."

Nevertheless, it is quite possible that this man, who has probably done more damage to his country than any other president in the 30-year history of the Islamic Republic, will enter a second term this summer -- simply because he lacks a convincing and courageous opponent.

Moussavi is of a significantly more robust nature than Khatami. As prime minister during the years of the Iraq war, he successfully managed the country's wartime economy. Critics note, however, that Moussavi's tenure was marked by a sharp rise in arrests and repression. He has not held any public office in 20 years and is virtually unknown among younger Iranians, who make up about 60 percent of the population.

On the surface, the elegant Moussavi would undoubtedly represent Iran more effectively on the international stage than Ahmadinejad. He appears to be more open to negotiations with the Americans. And yet, when it comes to the central nuclear conflict, the new candidate is just as obstinate as the current president. At a press conference in Tehran just last Monday, he noted that he too would not back down on the issue.

Which candidate the powerful religious leader Khamenei ends up supporting will likely be the decisive question. When Ahmadinejad came into office, he kissed Khamenei's hand. The two men were long considered extremely close ideologically, although since then Khamenei has more or less openly criticized Ahmadinejad's economic policies. Only recently, however, the religious leader spoke so positively about the president that many interpreted his words as an endorsement of his candidacy. Many observers of Iranian politics believe Ahmadinejad, because of his lasting popularity in rural areas, will be elected to a second term.

There are no questions that the Iranian president does not answer with questions of his own. He insists, most of all, on a few core concepts. One of them is justice, but he defines what justice is. Another is respect. He claims that he and his country are not afforded sufficient respect. This desire for recognition seems almost insatiable.

In Ahmadinejad's view, "hagh chordan," or the act of trampling on the rights of the Iranians, is a pattern that constantly repeats itself and comes from all sides, leading to a potentially dangerous mix of a superiority and an inferiority complex -- but not the irrationality of which the president is so often accused, especially by the Israelis.

Mr Netanyahu has said in the past that he sees no need for the Palestinians to have full separate statehood.

Analysts say the nuclear ambitions of Iran are likely to top the new cabinet's security agenda. In an apparent reference to that effect, Mr Netanyahu said the biggest threat to Israel and the world came from "the possibility of a radical regime armed with nuclear weapons". He further stressed the issue in comments given to a US magazine shortly before he was sworn in. "You don't want a messianic apocalyptic cult controlling atomic bombs," he said , in reference to Iranian President Mahmoud Ahmadinejad's belief in the imminent return of a Shia Islamic messianic figure, the Mehdi.