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"Israel's relentless settlement expansion, which has seriously eroded the prospects for a two-state solution, must cease, together with its closure of Gaza," said Mubarak, referring to a blockade by Israel of Gaza which is controlled by the militant group Hamas.

He said if Israel took "serious steps" toward peace with the Palestinians, the Arab world would do the same. "The priority should be to resolve the permanent borders of a sovereign and territorially contiguous Palestinian state, based on the 1967 lines, as this would unlock most of the other permanent status issues, including settlements, security, water and Jerusalem," said Mubarak.

Israel has sent messages to several Arab states recently, seeking to counter negative reactions to Prime Minister Benjamin Netanyahu's speech on Sunday and asking them to pressure Palestinian President Mahmoud Abbas to resume negotiations with Israel. As part of this effort, National Security Council chairman Uzi Arad met with Egyptian officials in Cairo this week, including intelligence chief Omar Suleiman.

According to Israel's Haaretz newspaper, the issue got more complicated after news leaked that Israeli Prime Minister Benjamin Netanyahu had agreed to support Hosni's candidacy in a secret deal with Egyptian President Hosni Mubarak.

Javier Solana, foreign policy chief for the European Union, said in Brussels on Monday that the group would reconsider its relationship with Israel if it did not remain committed to establishing a Palestinian state.

Mr. Lieberman also has few fans in Egypt, which has acted as an intermediary for Israel in several matters. Some months ago Mr. Lieberman complained that President Hosni Mubarak of Egypt had not agreed to come to Israel. “If he doesn’t want to, he can go to hell,” he added.“Imagine that Hossein Mousavi wins the Iranian presidency this spring and he names Mohammad Khatami as his foreign minister,” said Meir Javedanfar, an Iran analyst in Israel, referring to two Iranian leaders widely viewed as in the pragmatist camp. “With Lieberman as foreign minister here, Israel will have a much harder time demonstrating to the world that Iran is the destabilizing factor in the region.”

Secretary of State Hillary Rodham Clinton has already criticized Israeli plans to demolish Palestinian homes in East Jerusalem, and her department has criticized Israel’s banning of certain goods from Gaza.This represents a distinct shift in tone from the Bush era. An internal Israeli Foreign Ministry report during the Gaza war noted that compared with others in the United States, “liberals and Democrats show far less enthusiasm for Israel and its leadership.”

Some Israeli officials say they believe that what the country needs is to “rebrand” itself. They say Israel spends far too much time defending actions against its enemies. By doing so, they say, the narrative is always about conflict.“When we show Sderot, others also see Gaza,” said Ido Aharoni, manager of a rebranding team at the Foreign Ministry. “Everything is twinned when seen through the conflict. The country needs to position itself as an attractive personality, to make outsiders see it in all its reality. Instead, we are focusing on crisis management. And that is never going to get us where we need to go over the long term.” Mr. Gilboa, the political scientist, said branding was not enough. “We need to do much more to educate the world about our situation,” he said. Regarding the extra $2 million budgeted for this, he said: “We need 50 million. We need 100 million.”

By the time he was made director of EGIS, in 1993, two Islamist groups, the Gama'a Islamiya and al-Jihad, were conducting a campaign of bombings and assassinations.

In 1995, the extremists came within an ace of killing Mr Mubarak when 11 assassins opened fire on his limousine in Ethiopia's capital, Addis Ababa. The original plan had been to use a normal, soft-skinned vehicle. But the previous day, Gen Suleiman had insisted on flying an armoured car to Ethiopia. This undoubtedly saved Mr Mubarak's life. As the bullets ricocheted off the protected vehicle, Gen Suleiman was sitting beside his president. This searing experience forged the bond of trust between them.

The limousine Suleiman and Mubarak were travelling in came under fire, killing a number of bodyguards travelling with their convoy, before the driver was able to turn the car round and return to the airport. The attack was blamed on members of the al-Qaeda-linked Egyptian Islamic Jihad, also known as the Society of Struggle, and said to be co-ordinated by Showqi al-Islambouli, a member of Egyptian Islamic Jihad. His brother, Khalid Ahmed Showqi al-Islambouli, arranged and carried out the assassination of Mubarak's predecessor, Anwar Sadat, during a military parade in October 1981.

The Turkish press touts Davutoglu as "Turkey's Kissinger," and even Erdogan and Gül refer to him as "hoca" ("venerable teacher"). The country's foreign policy increasingly bears his signature. For example, at his suggestion, Turkish diplomats revived talks between Syria and Israel that had been discontinued in 2000, leading to secret peace talks that began in Istanbul in 2004. However, the talks were temporarily suspended in late 2008 because of parliamentary elections in Israel and the Gaza offensive.

Davutoglu is convinced that Ankara must be on good terms with all its neighbors, and it cannot fear contact with the countries and organizations branded as pariahs by the West, namely Syria, Iran, Hamas and Hezbollah. He believes that Turkey should have no qualms about acknowledging its Ottoman past -- in other words, it should become a respected regional power throughout the territory once ruled by the Ottoman Empire (see graphic).

Davutoglu, like President Gül, is from Central Anatolia and a member of a new elite influenced by Islamic thought. He completed his secondary-school education at a German overseas school, learned Arabic and taught at an Islamic university in Malaysia. He believes that a one-sided Western orientation is unhealthy for a country like Turkey.

The Turks say that they achieved more during the Gaza conflict than Middle East veterans like Egyptian President Hosni Mubarak, arguing that Hamas's willingness to accept Israel's ceasefire offer was attributable to Ankara's intervention. They also say that the fact that Erdogan angrily broke off a discussion with Israeli President Shimon Peres at the World Economic Summit in Davos cemented his reputation in the Islamic world as a friend of the Palestinians. When street fighting erupted in Lebanon between supporters of the pro-Western government and of Hezbollah in May 2008, Erdogan intervened as a mediator.

Ankara is also seeking to reduce tensions in the Caucasus region, where the Turks have often acted against Russia, prompting Moscow to accuse Turkey of being sympathetic to the Chechen cause. After the war in Georgia last summer, the Erdogan government brought together officials from Tbilisi and Moscow. Turkey and Armenia are now seeking to overcome long-standing hostility by establishing diplomatic relations and reopening their shared border.

Off the Horn of Africa, the US Fifth Fleet turned over the leadership of Combined Task Force 151, which is responsible for combating piracy in the Gulf of Aden and off the coast of Somalia, to the Turkish navy. At the same time, a man paid an official visit to Ankara who had not appeared in public since 2007: Iraqi Shiite leader Muqtada al-Sadr, the head of the notorious Mahdi Army militia. Davutoglu had sent a private jet to bring him to Turkey from his exile in Iran.

Critics like political scientist Soner Cagaptay describe Ankara's foreign policy as "pro-Arab Islamist." In a recent op-ed for the Turkish daily Hurriyet, Cagaptay argued that Turkish diplomats, who had once "looked to Europe, particularly France, for political inspiration" have now fallen for the Arab world, and generally for Islamists

Diplomats like Hakki Akil, the Turkish ambassador in Abu Dhabi, disagree. According to Akil, Turkey has acquired "soft power" by expanding its sphere of influence from the Balkans to Afghanistan, transporting Russian, Caspian Sea and Iranian oil and gas to the West, and building housing and airports in Kurdish northern Iraq. Europe, says Akil, ought to be pleased with Ankara's course. As Akil's boss Davutoglu said in Brussels, political stability, a secure energy corridor and a strong partner on its southeastern flank are all "in the fundamental interest of the EU."

According to a recent internal European Commission report, Turkey has made "only limited progress." Some EU countries have already abandoned the idea of accepting Turkey into their midst. In Bavaria, conservative Christian Social Union campaigners promote a message of "No to Turkey" as they make the rounds of beer tents. At a televised campaign appearance in Berlin, German Chancellor Angela Merkel and French President Nicolas Sarkozy made their opposition to EU membership for Turkey clear.

Ironically, Turkey's strategic importance for Europe "is even greater today than in the days of the Cold War," says Elmar Brok, a German member of the European Parliament for the conservative Christian Democratic Union who specializes in foreign policy issues. And then there is the paradox of the fact that the more intensively Turkey, out of frustration with Europe, engages with its eastern neighbors, the more valuable it becomes to the West. According to Brok, the West must "do everything possible to keep Ankara on board."

Brok and other members of the European Parliament envision making so-called "privileged partner" status palatable to Turkey. It would enable Turkey to have a similar relationship to the EU as Norway does today and to enjoy many of the benefits of EU membership, including access to the European single market, visa-free travel, police cooperation and joint research programs. But it would not, however, become a member.

Over the last few years, Egypt has worked exhaustively to unite the Palestinian leadership in a manner that upholds their commitment to a negotiated two-state solution. Egypt has also tried to broker a durable cease-fire between Hamas and Israel, in parallel with our mediation on a prisoner exchange. During Israeli Prime Minister Benjamin Netanyahu's visit to Egypt last month I renewed our commitment to resume these efforts.

The priority should be to resolve the permanent borders of a sovereign and territorially contiguous Palestinian state, based on the 1967 lines, as this would unlock most of the other permanent status issues, including settlements, security, water and Jerusalem.

Israel's relentless settlement expansion, which has seriously eroded the prospects for a two-state solution, must cease, together with its closure of Gaza. For their part, the Palestinians must continue to develop their institutional capacity while overcoming their division to achieve their aspirations for statehood.

While full normalization with Israel can only result from a comprehensive settlement including the Syrian, Lebanese as well as Palestinian track, the Arab side stands ready to reciprocate serious steps towards peace undertaken by Israel.

A historic settlement is within reach, one that would give the Palestinians their state and freedom from occupation while granting Israel recognition and security to live in peace.

With President Obama's reassertion of U.S. leadership in the region, a rare moment of opportunity presents itself. Egypt stands ready to seize that moment, and I am confident that the Arab world will do the same.

Binyamin Netanyahu, Israel's prime minister, has been pencilled in for a visit to the White House in the middle of next month. Netanyahu, since becoming prime minister, has refused to acknowledge the right of the Palestinians to a state of their own, as his predecessor had. But Obama yesterday stated firmly his commitment to the creation of an independent Palestinian state alongside Israel.

Mahmoud Abbas, the Palestinian president, is to make a separate visit, as is the Egyptian president, Hosni Mubarak. Egypt has been acting as a go-between between Abbas, who controls the West Bank, and Hamas, which controls Gaza.

Obama appears to have come round to the view of advisers that the US will ­effectively have to impose much of any deal on Israel and the Palestinians rather than wait for one to emerge from the two sides. He said yesterday: "I agree that we can't talk forever, that at some point steps have to be taken so that people can see progress on the ground. And that will be something that we will expect to take place in the coming months."My hope would be that over the next several months, that you start seeing ­gestures of good faith on all sides. I don't want to get into the details of what those gestures might be, but I think that the ­parties in the region probably have a pretty good recognition of what intermediate steps could be taken as confidence-building measures."

Speaking to what the Associated Press describes as a roomful of "cringing diplomats", the new foreign minister said Israel was not bound by the Annapolis peace talks. These were initiated in November 2007 to solve the Israeli-Palestinian conflict and involved around 40 countries.

"The Israeli government never ratified Annapolis; nor did [the] Knesset," said Lieberman, promising to honour only the US-initiated "road map" of 2002, which has long been in stalemate amid accusations from both sides.

In today's speech, Lieberman was more amiable towards Egypt, which he described as an "important element in the Arab world". This is an improvement on a few weeks ago, when he said the Egyptian president, Hosni Mubarak, could "go to hell".