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I turn to you, our Palestinian neighbors, led by the Palestinian Authority, and I say: Let’s begin negotiations immediately without preconditions.Israel is obligated by its international commitments and expects all parties to keep their commitments. We want to live with you in peace, as good neighbors.

I do not want war.  No one in Israel wants war.

Territorial withdrawals have not lessened the hatred, and to our regret, Palestinian moderates are not yet ready to say the simple words: Israel is the nation-state of the Jewish people, and it will stay that way.

to our regret, this is not the case with the Palestinians. The closer we get to an agreement with them, the further they retreat and raise demands that are inconsistent with a true desire to end the conflict. Many good people have told us that withdrawal from territories is the key to peace with the Palestinians. Well, we withdrew. But the fact is that every withdrawal was met with massive waves of terror, by suicide bombers and thousands of missiles. We tried to withdraw with an agreement and without an agreement.  We tried a partial withdrawal and a full withdrawal.  In 2000 and again last year, Israel proposed an almost total withdrawal in exchange for an end to the conflict, and twice our offers were rejected. We evacuated every last inch of the Gaza strip, we uprooted tens of settlements and evicted thousands of Israelis from their homes, and in response, we received a hail of missiles on our cities, towns and children.  The claim that territorial withdrawals will bring peace with the Palestinians, or at least advance peace, has up till now not stood the test of reality.

But we must also tell the truth in its entirety: within this homeland lives a large Palestinian community. We do not want to rule over them, we do not want to govern their lives, we do not want to impose either our flag or our culture on them.

The Palestinian leadership must arise and say: “Enough of this conflict. We recognize the right of the Jewish people to a state of their own in this land, and we are prepared to live beside you in true peace.”  I am yearning for that moment, for when Palestinian leaders say those words to our people and to their people, then a path will be opened to resolving all the problems between our peoples, no matter how complex they may be.

Therefore, a fundamental prerequisite for ending the conflict is a public, binding and unequivocal Palestinian recognition of Israel as the nation state of the Jewish people.  To vest this declaration with practical meaning, there must also be a clear understanding that the Palestinian refugee problem will be resolved outside Israel’s borders.  For it is clear that any demand for resettling Palestinian refugees within Israel undermines Israel’s continued existence as the state of the Jewish people.

Tiny Israel successfully absorbed tens of thousands of Jewish refugees who left their homes and belongings in Arab countries.  Therefore, justice and logic demand that the Palestinian refugee problem be solved outside Israel’s borders.

the connection between the Jewish people and the Land of Israel has lasted for more than 3500 years.  Judea and Samaria, the places where Abraham, Isaac, and Jacob, David and Solomon, and Isaiah and Jeremiah lived, are not alien to us.  This is the land of our forefathers. The right of the Jewish people to a state in the land of Israel does not derive from the catastrophes that have plagued our people. True, for 2000 years the Jewish people suffered expulsions, pogroms, blood libels, and massacres which culminated in a Holocaust - a suffering which has no parallel in human history.  There are those who say that if the Holocaust had not occurred, the state of Israel would never have been established.  But I say that if the state of Israel would have been established earlier, the Holocaust would not have occured. 

our right to build our sovereign state here, in the land of Israel, arises from one simple fact: this is the homeland of the Jewish people, this is where our identity was forged. 

the simple truth is that the root of the conflict was, and remains, the refusal to recognize the right of the Jewish people to a state of their own, in their historic homeland.   In 1947, when the United Nations proposed the partition plan of a Jewish state and an Arab state, the entire Arab world rejected the resolution. The Jewish community, by contrast, welcomed it by dancing and rejoicing. The Arabs rejected any Jewish state, in any borders. Those who think that the continued enmity toward Israel is a product of our presence in Judea, Samaria and Gaza, is confusing cause and consequence. The attacks against us began in the 1920s, escalated into a comprehensive attack in 1948 with the declaration of Israel’s independence, continued with the fedayeen attacks in the 1950s, and climaxed in 1967, on the eve of the six-day war, in an attempt to tighten a noose around the neck of the State of Israel.  All this occurred during the fifty years before a single Israeli soldier ever set foot in Judea and Samaria .

In my vision of peace, in this small land of ours, two peoples live freely, side-by-side, in amity and mutual respect.  Each will have its own flag, its own national anthem, its own government.  Neither will threaten the security or survival of the other.

This policy must take into account the international situation that has recently developed.  We must recognize this reality and at the same time stand firmly on those principles essential for Israel.

Palestinians must clearly and unambiguously recognize Israel as the state of the Jewish people.  The second principle is: demilitarization. The territory under Palestinian control must be demilitarized with ironclad security provisions for Israel.  Without these two conditions, there is a real danger that an armed Palestinian state would emerge that would become another terrorist base against the Jewish state, such as the one in Gaza. 

In order to achieve peace, we must ensure that Palestinians will not be able to import missiles into their territory, to field an army, to close their airspace to us, or to make pacts with the likes of Hezbollah and Iran.

It is impossible to expect us to agree in advance to the principle of a Palestinian state without assurances that this state will be demilitarized.

Therefore, today we ask our friends in the international community, led by the United States, for what is critical to the security of Israel:  Clear commitments that in a future peace agreement, the territory controlled by the Palestinians will be demilitarized: namely, without an army, without control of its airspace, and with effective security measures to prevent weapons smuggling into the territory – real monitoring, and not what occurs in Gaza today.  And obviously, the Palestinians will not be able to forge military pacts.

Without this, sooner or later, these territories will become another Hamastan. And that we cannot accept.

Regarding the remaining important issues that will be discussed as part of the final settlement, my positions are known: Israel needs defensible borders, and Jerusalem must remain the united capital of Israel

The territorial question will be discussed as part of the final peace agreement.  In the meantime, we have no intention of building new settlements or of expropriating additional land for existing settlements. But there is a need to enable the residents to live normal lives, to allow mothers and fathers to raise their children like families elsewhere.  The settlers are neither the enemies of the people nor the enemies of peace.  Rather, they are an integral part of our people, a principled, pioneering and Zionist public.

Unity among us is essential and will help us achieve reconciliation with our neighbors.

If the Palestinians turn toward peace – in fighting terror, in strengthening governance and the rule of law, in educating their children for peace and in stopping incitement against Israel - we will do our part in making every effort to facilitate freedom of movement and access, and to enable them to develop their economy.  All of this will help us advance a peace treaty between us. 

Above all else, the Palestinians must decide between the path of peace and the path of Hamas. The Palestinian Authority will have to establish the rule of law in Gaza and overcome Hamas.  Israel will not sit at the negotiating table with terrorists who seek their destruction.   Hamas will not even allow the Red Cross to visit our kidnapped soldier Gilad Shalit

If we receive this guarantee regarding demilitirization and Israel’s security needs, and if the Palestinians recognize Israel as the State of the Jewish people, then we will be ready in a future peace agreement to reach a solution where a demilitarized Palestinian state exists alongside the Jewish state. 

The political elites in Europe have not yet responded to these problems. There have been no significant public debates; neither about the euro, EU expansion, a proposed constitution, nor the European Union's responsibilities in the Balkans and Afghanistan. Instead, Europe's political elites have remained silent. EU policies are determined, following the pre-1989 Western European tradition, by a cartel of political elites that is insulated from the democratic public. The more that Europe lacks the acceptance of its citizens, the harder it will befor the Union to meet the coming geopolitical challenges.

The assumption that the European Union lacks competence in foreign and security policy is misguided. For nearly a decade, the European Union has had access to the entire spectrum of institutional capacities -- including military capability -- that is necessary for active participation in global politics. It is an equally unconvincing argument that the 27 member states are simply too difficult to coordinate to actively engage in international politics. On the contrary: the foreign and security strategy of the European Union is remarkably consistent and coherent, from effective multilateralism, to peaceful conflict resolution, to addressing the problem of fragile statehood. Europe only needs to match its words with action. Member states need to abandon their vain attachment to national prerogatives and speak with one foreign policy voice. Here the largest member states -- Great Britain, France, and Germany -- have often been the biggest hindrance.

Until now, the European Union -- despite its inclusion in the Middle East Quartet -- has always been reluctant to propose solutions to the conflict between Israel and Palestine. Instead, Europe has essentially hidden behind the United States. Now, after eight years of the Bush administration, America has lost nearly all of its credibility, and it is going to be a while before President Obama can do anything to significantly reestablish it. There is a need, in other words, for the European Union and its member states to play a larger role -- not least, because the European Union has pro-Arab as well as pro-Israeli positions represented in its institutions and among its member states. The European Union could credibly serve as an honest broker in the region -- if it only wanted to.

The era of the G-7 or G-8, in which the western industrial states (and Russia) could keep to themselves, is over. There is no alternative to a G-20 that systematically includes developing nations from all regions of the world into the process of global governance.

Unfortunately, the countries of the European Union allow themselves to be played against one another yet again -- especially along the economic fault line between old and new member states. Europe's answer to the economic and financial crisis is not encouraging. Instead of a coordinated reaction of the EU member states, national measures have taken priority. Even Germany -- despite all its pro-European rhetoric -- has shown little appetite for cooperation.This failure is particularly frustrating in light of the fact that Europe has the world's best institutional capacity to develop integrated answers to crossborder economic challenges.

In addition, there is still a clear asymmetry between negative and positive integration, as political scientist Fritz Scharpf diagnosed in the mid-1990s. The creation of an internal market continues to trump the development of economic and social policies that can steer and correct that very market. It is no accident that the call for a "social Europe" is getting ever louder. The inability for European governments to coordinate their responses to the financial crisis has contributed to the legitimation crisis of European integration.

The post-Cold War era is over. Europe has no choice but to orient itself to the challenges of the future. Before anything else, the European Union needs to gain the approval and trust of its own citizens. The failed referenda pose less of a threat to Europe than does the continent's growing Euro-skepticism and the silence of European elites in the face of criticism "from below." Those who are believers in Europe and European unification must actively take on the challenge of convincing others.

The deceased politician and scholar Peter Glotz, just several weeks after the end of the fateful year 1989, wrote in this very publication that "the decisive question of the next decade will be whether the European elites manage to overcome the narrow categories of the nation state. ... In Europe, the nations are too weak to engage in global politics; at the same time, they are strong enough to prevent the development of an effective supranational European politics." Twenty years later, those observations have unfortunately lost none of their truth.

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.

The report cited two alleged incidents from January 3. In one, it said, after a tank round struck near a house, a father and his two sons -- both younger than 11 -- emerged to look at the damage. "As they exited their home, IDF soldiers shot and killed them (at the entrance to their house), with the daughter witnessing," the report said. In the second, it said, "Israeli soldiers entered a family house in the Zeitoun neighborhood of Gaza City. Standing at the doorstep, they asked the male head of the household to come out and shot him dead, without warning, while he was holding his ID, hands raised up in the air, and then started to fire indiscriminately and without warning into the room where the rest of the family was huddled together. "The eldest son was shouting in vain the word 'Children' in Hebrew to warn the soldiers. The shooting did not stop until everyone was lying on the floor. The mother and four of the brothers, aged 2-12 years, had been wounded, one of them, aged 4, fatally."

The alleged instances occurred during Operation Cast Lead, which was launched December 27 to halt rocket attacks into southern Israel from Gaza and ended January 17 with a cease-fire. The U.N. report called the response by Israel disproportionate. Of the 1,453 people estimated killed in the conflict, 1,440 were Palestinian, including 431 children and 114 women, the report said. The 13 Israelis killed included three civilians and six soldiers killed by Hamas, and four soldiers killed by friendly fire, it said.

The report said the Israeli operation resulted in "a dramatic deterioration of the living conditions of the civilian population." It cited "targeted and indiscriminate" attacks on hospitals and clinics, water and sewage treatment facilities, government buildings, utilities and farming and said the offensive "intensified the already catastrophic humanitarian situation of the Palestinian people." It said Israeli strikes damaged more than 200 schools and left more than 70,000 people homeless. "There are strong and credible reports of war crimes and other violations of international norms," it said, adding that many observers have said war crimes investigations should be undertaken.

Mark Regev, a spokesman for Israeli Prime Minister Ehud Olmert, called the report "another example of the one-sided and unfair attitude of the rapporteur of the Human Rights Council, a council that has been criticized by current and previous secretaries-general for its unbalanced attitudes toward Israel." He added, "The negative fixation on Israel by the council has done a disservice to the issue of human rights internationally as has been attested to by the leading NGO's [nongovernmental organizations] on human rights."

Another report issued Monday also was critical of the IDF. The report from Physicians for Human Rights said the Gaza incursion violated IDF's own code of ethics. The report by the medical group, which shared the 1997 Nobel Peace Prize, cited instances where it said IDF forces did not evacuate injured civilians for days and prevented Palestinian teams from reaching the wounded, and said some of them died as a result. It said 16 Palestinian medical personnel were killed by IDF fire and 25 were wounded during the IDF operation, and accused the IDF of attacking 34 medical centers in violation of the IDF's own "ethical code for fighting terror." In response, the IDF accused Hamas of having used medical vehicles, facilities and uniforms to conceal its members' activity. "Hamas used ambulances to 'rescue' terror activists from the battlefield and used hospitals and medical facilities as hiding places," the Israelis said in a written statement. "Despite this, throughout the fighting, IDF forces were instructed to avoid firing at ambulances, even if they were being used by armed fighters. They were instructed only to shoot if there was fire towards our forces emanating from the direction of the ambulance." Regarding the reported delays in casualty evacuations, "there existed real difficulties in evacuating the injured, due to the roadblocks, booby-trapped roads and dirt mounds placed by the Hamas as well as the considerable damage to the infrastructure," the statement said.

he Israeli daily Haaretz newspaper reported that Israeli soldiers who had finished basic training ordered the shirts, one of which showed a pregnant Arab in the crosshairs of a gun sight with a caption reading "1 Shot 2 Kills." Another showing a small child in a gun's sight was captioned, "The smaller they are, the harder it is." "The examples presented by The Haaretz reporter are not in accordance with IDF values and are simply tasteless," the Israeli military said in a written statement. "This type of humor is unbecoming and should be condemned."

Israeli soldiers said last week that Palestinian civilians were killed and Palestinian property intentionally destroyed during Israel's military campaign in Gaza, according to Haaretz. The IDF has said it is investigating the claims, but its top general expressed skepticism Monday. "I don't believe that soldiers serving in the IDF hurt civilians in cold blood, but we shall wait for the results of the investigation," Lt. Gen. Ashkenazi, the chief of staff, said in a speech. "I tell you that this is a moral and ideological army." He blamed Hamas for choosing "to fight in heavily populated areas. "It (was) a complex atmosphere that includes civilians and we took every measure possible to reduce harm of the innocent," he said, according to an IDF statement.

Today, the hopes that those civilian militias inspired are gone, brushed away by the realization that Pakistanis can do little to stem the Taliban advance if their government and military will not help them.

The peace deal the military struck with the Taliban in February in neighboring Swat further demoralized people in Buner. Residents and local officials said they asked themselves how they could continue to resist the Taliban when the military had abandoned the effort. The Taliban were emboldened by the deal: it called for the institution of Shariah, the strict legal code of Islam based on the Koran, throughout Malakand Agency, which includes Swat and Buner. It allowed the Taliban amnesty for their killings, floggings and destruction of girls schools in Swat.

Still, when the Taliban rolled into Buner from Swat through the town of Gokan on April 5, a well-to-do businessman, Fateh Mohammed, organized another posse of civilian fighters to take on the militants in the town of Sultanwas. Five civilians and three policemen were killed, he said. Some newspaper reports said 17 Taliban were killed.

At that point, the chief government official in charge of Malakand, Mohammed Javed, proposed what he called peace talks. Mr. Javed, an experienced bureaucrat in the Pakistani civil service, was appointed in late February as the main government power broker in Malakand even though he was known to be sympathetic to the Taliban, a senior government official in North-West Frontier Province said. The government had been under pressure to bring calm to Swat and essentially capitulated to Taliban demands for Mr. Javed’s appointment, the official said.

In an apparent acknowledgment that Mr. Javed had been too sympathetic to the Taliban, the government announced Saturday that he had been replaced by Fazal Karim Khattack.

In what some residents in Swat and now in Buner say had been a pattern of favorable decisions led by Mr. Javed on behalf of the Taliban, the talks in Buner turned out to be a “betrayal,” said a former police officer from the area, who was afraid to be identified.

To bolster their strength, and insinuate themselves in Buner, the Taliban also relied heavily on the adherents of a hard-line militant group, the Movement for the Implementation of the Shariah of Muhammad, which has agitated for Islamic law in Pakistan. Their leader, Sufi Mohammed, comes from the region around Swat and Buner and has whipped up local support and intimidated Taliban opponents.

early last week the Taliban showed their power by ordering the state courts shut. They announced that they would open Islamic courts, practicing Shariah, by the end of the month. The militants have also placed a tax payable to the Taliban on all marble quarried at mines, said a senior police officer who worked in Buner.

The police were so intimidated they mostly stayed inside station houses, he said. “They are setting up a parallel government.”

With their success in Buner, the Taliban felt flush with success and increasingly confident that they could repeat the template, residents and analysts said. In the main prize, the richest and most populous province, Punjab, in eastern Pakistan, the Taliban are relying on the sleeper cells of other militant groups, including the many fighters who had been trained by the Pakistani military for combat in Kashmir, and now felt abandoned by the state, they said.

It would not be difficult for the Taliban to seize Peshawar, the capital of North-West Frontier Province, by shutting down the airport and blocking the two main thoroughfares from Islamabad, a Western official with long experience in the province said. At midweek, a convoy of heavily armed Taliban vehicles was seen barreling along the four-lane motorway between Islamabad and Peshawar, according to Mr. Sherpao, the former minister of the interior.

Across North-West Frontier Province, the Taliban are rapidly consolidating power by activating cells that consisted of a potent mix of jihadist groups, he said.

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 Mullen-Ashkenazi axis, like similar axes between heads of the two countries' intelligence communities, allows the Americans to sense the genuine atmosphere beneath the public propaganda disseminated in Israel and to understand the extent to which Israel is really concerned about the Iranian nuclear threat. It also affords them the opportunity to reassure, to delay and, at the very least, to walk the hidden line between the desire not to officially know in advance, in order to safeguard the ability to shrug off responsibility, and the need not to be surprised.

Make no mistake about the Obama administration, when it comes to Iran: Its policy differs from that of the Bush administration only in style, not in content. Its officials express themselves in positive terms, cloaked in an expression of conciliation, as opposed to the angry face worn by president George W. Bush - but the conclusions are similar, as are the results. Gary Samore, who Jones put in charge of coordinating the issue of weapons of mass destruction, said often, before his appointment, including during a speech at the Herzliya Conference in 2007, organized by Uzi Arad (today Benjamin Netanyahu's national security advisor), that the Iranians will continue their efforts to obtain nuclear weapons and that economic and diplomatic pressure will not help.

Ashton Carter, recently nominated by the president to be under secretary of defense for acquistion, technology and logistics, offered a similar analysis for the Bush administration, when he outlined three alternatives to confronting Iran. Plan B3, the military option, also entailed a possible bombing of Iranian oil installations, which are not protected and concealed like components of the nuclear infrastructure. The prevailing balance of power within the Obama administration tends to favor attacking Iran's nuclear installations, or to tolerate an Israeli attack. A prominent opponent of using military force against Iran, Charles Freeman, who had been slated to head the U.S. National Intelligence Council, was dropped under pressure of Israel's American supporters.

Obama will wait - not only for Iranian elections, scheduled for June (and those in Lebanon, that same month), but also for September's elections in Germany, and for Britons to vote at more or less the same time (elections have yet to be scheduled), in order to know who will stand by his side in the trenches. In that way 2009 will pass without a decision, but not all of 2010, because come that November, Congressional elections will be held, immediately after which the Democrats will begin organizing Obama's reelection campaign. The summer of 2010 will be critical, because by then the evacuation of most of the American forces from Iraq will be completed and fewer exposed targets will remain for Iranian revenge attacks.

The development of the Iron Dome system for intercepting Katyusha rockets, whose first battery will protect the environs north of the Gaza Strip (Ashkelon, Sderot), is expected to be completed by the summer of 2010. That will make it difficult for Hamas to open another front to harass the IDF on Iran's behalf. In the coming months, the tests of the Arrow missile defense system will continue, in a scenario that simulates an attack by a long-distance Iranian missile. The tests will be carried out in cooperation with American systems, including the large radar facility at the Nevatim air base. Preparations for defence against a radioactive attack will also improve, at an event to be staged at either an Israeli or an American port, as will preparations for a plague of smallpox, in a joint exercise involving Israel and one of NATO's important European member states.

In the Pentagon's most recent report about the strengthening of China, Israel receives a pat on the back, of the kind given to a well-behaved child: It has been cured of the habit of providing air-to-ground Harpy missiles to China, which extend the Chinese air force's operational range, and has also enforced stricter export supervision. The Americans are displaying a false naivete: Nothing has changed except for two offices having been moved around administratively. The decision to launch a military operation against Iran, particularly using American-made planes (such as the F-16, whose supply was suspended after Israel's 1981 attack on the Iraqi nuclear reactor), will have to be preceded by feelers to discern where Obama stands exactly on the continuum between approval and opposition. Apparently Israel wants Obama to emerge sufficiently strengthened from this week's NATO summit, but still too weak to say no to Israel.

The Lebanese chief investigator and true hero of the story didn't live to witness many of the recent successes in the investigation. Captain Eid, 31, was killed in a terrorist attack in the Beirut suburb of Hasmiyah on Jan. 25, 2008. The attack, in which three other people were also killed, was apparently intended to slow down the investigation. And, once again, there was evidence of involvement by the Hezbollah commando unit, just as there has been in each of more than a dozen attacks against prominent Lebanese in the last four years.

The UN tribunal's order to release the generals who were arrested at his specific request is, at any rate, a serious blow to the German prosecutor. One of the four, Jamal al-Sayyid, the former Lebanese general security director, has even filed a suit against Mehlis in France for "manipulated investigations." In media interviews, such as an interview with the Al-Jazeera Arab television network last week, Sayyid has even taken his allegations a step further, accusing German police commissioner Gerhard Lehmann, Mehlis's assistant in the Beirut investigations, of blackmail.

The revelations about the alleged orchestrators of the Hariri murder will likely harm Hezbollah. Large segments of the population are weary of internal conflicts and are anxious for reconciliation. The leader of the movement, which, despite its formal recognition of the democratic rules of the game, remains on the US's list of terrorist organizations, probably anticipates forthcoming problems with the UN tribunal. In a speech in Beirut, Nasrallah spoke of the tribunal's "conspiratorial intentions."

Hariri's growing popularity could have been a thorn in the side of Lebanese Shiite leader Nasrallah. In 2005, the billionaire began to outstrip the revolutionary leader in terms of popularity. Besides, he stood for everything the fanatical and spartan Hezbollah leader hated: close ties to the West and a prominent position among moderate Arab heads of state, an opulent lifestyle, and membership in the competing Sunni faith. Hariri was, in a sense, the alternative to Nasrallah.

Sayyid claims that Lehmann, a member of Germany's Federal Criminal Police Office (BKA) proposed a deal with the Syrian president to the Lebanese man. Under the alleged arrangement, Assad would identify the person responsible for the Hariri killing and convince him to commit suicide, and then the case would be closed. According to Sayyid, the authorities in Beirut made "unethical proposals, as well as threats," and he claims that he has recordings of the incriminating conversations.

the spotlight-loving Jamil al-Sayyid could soon be embarking on a new career. He is under consideration for the post of Lebanon's next justice minister.

There are other examples, like Turkmenistan’s May signing of a gas exploration deal with a German company, and Armenia’s awarding of a major national honor to Moscow’s nemesis, President Mikheil Saakashvili of Georgia. But the biggest came last week when Kyrgyzstan — set to receive $2.15 billion in Russian aid — reversed a decision that had been seen as a coup for Moscow, last winter’s order terminating the American military’s use of the Manas Air Base there.

There are few projects that matter more to Russia than restoring its influence in the former Soviet republics, whose loss to many in Moscow is still as painful as a phantom limb. Competition over Georgia and Ukraine has brought relations between Moscow and Washington to a post-cold-war low, and the matter is bound to be central to the talks that begin on Monday between Russia’s president, Dmitri A. Medvedev, and President Obama.

Kyrgyzstan’s reversal on Manas is a case study in canny horse trading. Russian officials, including Mr. Medvedev, have said they blessed the decision, and that may be true, but President Kurmanbek S. Bakiyev is the one who walked away with what he wanted. Moscow wanted the base, a key transit hub for the United States’ war in Afghanistan, shut down; Kyrgyzstan wanted more money. In February, Moscow seemed to have achieved a master stroke — at a news conference announcing the pledge of $2.15 billion in Russian aid, Mr. Bakiyev said the United States would have to leave Manas in six months.

Russia’s ability to attract its neighbors to its side and keep them there is unimpressive. The Kremlin’s methods have been reactive and often bullying, combining incentives like cheap energy or cash disbursement with threats of trade sanctions and gas cutoffs.The war in Georgia seems to have hurt Moscow in that regard. Rather than being cowed into obedience, as most Western observers feared, the former republics seem to have grown even more protective of their sovereignty. Moreover, the leaders themselves have thrived by playing Russia and the West and, in some cases, China off against one another, although that has not brought stability or prosperity to their countries. In Moscow’s so-called zone of privileged interests, in other words, Russia is just another competitor.

The first Russian payments — a $150 million emergency grant and a $300 million low-interest loan — arrived in April, allowing Mr. Bakiyev to pay wages and pensions as he began his re-election campaign. Then Kyrgyzstan shocked the region by announcing a new agreement with the United States. Washington will pay more than triple the rent for the base — now called a “transit center” — increasing its annual payment to $60 million from $17.4 million, while kicking in upwards of $50 million in grants to the government. No one knows if the Kremlin will make good on the rest of its pledge.

Moldova, which has just received a Russian pledge of $500 million four weeks before voters go to the polls to elect a new Parliament.

Belarus’s president, Aleksandr Lukashenko, who is avidly pursuing Western partners, has been barraged with carrots and sticks from Moscow — first promised $2 billion in Russian aid, then bitterly chastised for his economic policy, then punished with a crippling ban on the import of milk products, then rewarded by a reversal of the import ban. Russia regards Mr. Lukashenko’s truculence as a bluff.

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.

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.

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.

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.

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.

Less than four months before Germany's general election, last night's outcome augured well for Merkel's hopes of ditching her grand coalition in favour of a centre-right alliance with the small Free Democrats, who made the biggest gains, from six to more than 10%.

Next door in Austria, the chancellor and leader of the Social Democrats, Werner Faymann, led his party to its worst ever election result, just over 23%.In both countries, the Christian democrats won comfortably, but Merkel's Christian Democrats and her Bavarian CSU allies were six points down, on 38%.

France's president, Nicolas Sarkozy, claimed triumph with 28% for his UMP party to the Socialists 17%, the first time a sitting French president has won a European election since the vote began 30 years ago.

In Italy, the centre-right government of Silvio Berlusconi also did well, despite his marital breakdown and scandals over parties at his Sardinian villa, while in Spain the Socialist government of José Luis Rodríguez Zapatero also lost the election to conservatives.

With the social democrats licking their wounds and the centre-right scoring ­victories whether in power or in opposition, the other signal trend of the ballot was the breakthroughs achieved by extreme right-wing nationalists and xenophobes.

Following on from the triumph of Geert Wilders, the anti-Islam campaigner, who came second with 17% in the Netherlands on Thursday, the hard-right and neo­fascists chalked up further victories .

The anti-Gypsy extremists in Hungary, Jobbik, took three of the country's 22 seats; in Austria two far-right parties mustered 18%, and extreme Slovak nationalists gained their first seat in the European parliament.

Anti-Brussels candidates and Eurosceptics also won more seats in Denmark, Finland, Austria, and the Czech Republic.

With the jobless numbers soaring amid the worst economic crisis in the lifetimes of European voters, the centre left is clearly failing to benefit politically in circumstances that might be expected to boost its support.

Estimates of the new balance of power in the 736-seat assembly suggest that the centre right will have around 270 seats to the socialists' 160, a much wider margin than predicted.

Hans-Gert Pöttering, the outgoing president, or speaker, of the European parliament, stressed that Europeans "want" the parliament, but conceded that that desire would not be reflected in the turnout.

The damning popular verdict on that assertion, however, was the lowest turnout in 30 years. It was estimated at around 43%, compared with 45% last time, and 62% in Europe's first election in 1979.

Yet Pakistani authorities deployed just several hundred poorly paid and equipped constabulary forces to Buner, who were repelled in a clash with the insurgents, leaving one police officer dead

The limited response set off fresh scrutiny of Pakistan’s military, a force with 500,000 soldiers and a similar number of reservists. The army receives $1 billion in American military aid each year but has repeatedly declined to confront the Taliban-led insurgency, even as it has bled out of Pakistan’s self-governed tribal areas into Pakistan proper in recent months.

The military remains fixated on training and deploying its soldiers to fight the country’s archenemy, India. It remains ill equipped for counterinsurgency, analysts say, and top officers are deeply reluctant to be pressed into action against insurgents who enjoy family, ethnic and religious ties with many Pakistanis.

In the limited engagements in which regular army troops have fought the Taliban in the tribal areas and sections of the Swat Valley, they not only failed to dislodge the Taliban, but also convinced many Pakistanis that their own military was as much of a menace as the Islamic radicals it sought to repel, residents and analysts say.

In Washington, a Defense Department official who is monitoring Pakistan closely said that the poorly trained constabulary force was sent Thursday because Pakistani Army troops were not available, and Pakistani generals were reluctant to pull reinforcements off the border with India — something American officials have encouraged them to do.

Instead, the military, which is stretched thin in the areas along the Afghan border, has favored negotiations, and the civilian government has acquiesced. “The government is too worried about its own political survival to take on the militants,” the Defense Department official said.

Where it has engaged the insurgents, the Pakistani Army, untrained in counterinsurgency, has become reviled by the civilian population for its heavy-handed tactics, which have cost many lives while failing to stop the Taliban. At the same time, the police and paramilitary forces have proved too weak to stand up to the militants. In Buner, desperate residents had resorted to forming their own militias, as much to keep out the military as the Taliban. That effort, too, has now failed.

On Capitol Hill, legislators preparing to introduce a bill to provide Pakistan with $7.5 billion in nonmilitary aid over five years may face a steep challenge.

In a sign of the urgency of the crisis, the special envoy for the region, Richard C. Holbrooke, is sending Secretary of State Hillary Rodham Clinton memos several times a day with his latest reading of the situation in Pakistan, an American official said. Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, briefly visited Pakistan on Wednesday night and Thursday from Afghanistan, to meet with Gen. Ashfaq Parvez Kayani, the Pakistani Army chief of staff. An American official briefed on discussions said the Pakistani leadership was “very concerned.”

Buner (pronounced boo-NAIR), home to about one million people, lies in the heart of North-West Frontier Province, bordering seven other districts. Its capture not only advances the Taliban closer to the capital, but also gives the Taliban a vital hub to extend their reach.

More than 30 armed militants entered the Shangla district, east of the main Swat Valley and north of Buner, and were seen patrolling an area around Loch Bazaar, the independent channel Geo TV reported Thursday, quoting witnesses.Government officials also confirmed that militants have been seen in Totali, far south in Buner and close to the boundary with the Swabi district, which lies close to the main highways into the capital.

Armed militants have also been seen visiting mosques and patrolling in Rustam, a town on the boundary between Buner and the adjoining district of Mardan, said Riaz Khan, a lawyer living in Mardan, the second largest town in North-West Frontier Province. “People are anxious and in a state of fear,” he said.

The Taliban were making a concerted push into areas that overlook the capital, lawmakers and government officials in North-West Frontier Province said.

A powerful religious party leader, Fazlur Rehman, who is allied with the government, warned that militants had reached into the Mansehra district, close to the Tarbela Dam, a vital source of electricity to the center of the country.

“If the Taliban continue to move at this pace they will soon be knocking at the door of Islamabad,” he told Parliament on Wednesday, adding that Margalla Hills, north of the capital, seem to be the only hurdle to the Taliban advance.

The Pakistani Taliban, who number in the thousands across the tribal areas and the Swat region, have declared their aim of establishing Shariah rule throughout Pakistan. But for now, their expansion may be opportunistic and their strength sufficient only to establish local fiefdoms, or “micro-emirates of Shariah,” said Christine Fair, a senior research associate at the RAND Corporation.“I don’t know what the Taliban’s game plan is, but what seems apparent is the state has no game plan,” she said. “The Pakistani state is not able to stop them and they expand where they can.”

This means that, unlike in Britain or the US, the election will almost certainly not be dominated by a single personality. In an opinion poll this year for the Centre for the Study of Developing Societies, a Delhi thinktank, no leader enjoyed 25% approval as a possible prime minister.

The most popular leader is probably Sonia Gandhi, president of the Congress party. Gandhi, 63, who was born in Italy, has proved an astute politician, winning the last election against the odds but refusing to become prime minister, knowing her foreign birth would become too hot an issue. Instead she appointed Manmohan Singh as prime minister, leaving him to formulate policy while she handled the complex deal-making involved in coalition building. She also brought in her son Rahul, 38, who has begun to rebuild the party. Her daughter Priyanka, 37, is a star campaigner who draws huge crowds but so far has not contested an election.

The Congress party, say pundits, is the favourite because it is in power and can point to tangible achievements. For example, it pushed through big pay rises for 4.5 million government employees this year, engendering goodwill in urban areas.

The elite applauded Singh for winning a knife-edge parliamentary vote last year in which he secured a nuclear deal with the US that allowed India to keep its atomic weapons and still be sold nuclear reactors.

Most important perhaps in terms of votes, the Congress coalition also set up the first social security scheme in India, guaranteeing 100 days of work to poor households in the countryside. Although the cost is estimated at 400bn rupees (£5.4bn) this year, it should bring in votes among India's 600 million agricultural workforce.

In the opposite camp is the Bharatiya Janata party, led by Lal Krishna Advani, 81. The party's pollsters say it should win votes based on three main issues: terror attacks, the dynastic politics of the Congress party and the appeasement of minorities, especially Muslims.

These three issues were fused in the uproar over speeches by Varun Gandhi, 29, the great grandson of India's first prime minister, Jawaharlal Nehru. Although a Gandhi, he has become a mascot for the BJP. In March the budding poet told cheering crowds in a marginal constituency that he would cut the "head of Muslims" (sic) and if anyone raised a finger against Hindus he would "cut that hand".

Another powerful line of attack is that India's economic growth, which has been at 8% for five years, never reached the ordinary man.

However, the real power lies with the regional parties. Congress and the BJP square up in only seven out of 28 states. In almost every other state, the contest boils down to one of the national parties facing a local politician.

The most important of these is likely to be Kumari Mayawati. Her dedicated cadre of untouchable workers and her wooing of the upper castes created an upset in 2007 when her party swept to power in India's most populous state, Uttar Pradesh. Her policies are claimed to be about social justice but in reality are designed to capture jobs through quotas for her supporters. Mayawati's victory in the northern state, which has 80 seats and is considered a bellwether of public opinion, was a political earthquake.

Analysts say Mayawati's significance is the possible emergence of a third national party. If the regional parties coalesce around her, said Mahesh Rangarajan, a political commentator, she could be the "fulcrum of a new power arrangement". If Mayawati gets 40 or more seats, "she is possibly prime minister", he added.

Mr. Obama will meet with leaders from the region this weekend. They will discuss the economic crisis, including a plan to replenish the Inter-American Development Bank, a Washington-based pillar of clout that has suffered losses from the financial crisis.

Meanwhile, China is rapidly increasing its lending in Latin America as it pursues not only long-term access to commodities like soybeans and iron ore, but also an alternative to investing in United States Treasury notes.

One of China’s new deals in Latin America, the $10 billion arrangement with Argentina, would allow Argentina reliable access to Chinese currency to help pay for imports from China. It may also help lead the way to China’s currency to eventually be used as an alternate reserve currency. The deal follows similar ones China has struck with countries like South Korea, Indonesia and Belarus.

As the financial crisis began to whipsaw international markets last year, the Federal Reserve made its own currency arrangements with central banks around the world, allocating $30 billion each to Brazil and Mexico. (Brazil has opted not to tap it for now.) But smaller economies in the region, including Argentina, which has been trying to dispel doubts about its ability to meet its international debt payments, were left out of those agreements.

Details of the Chinese deal with Argentina are still being ironed out, but an official at Argentina’s central bank said it would allow Argentina to avoid using scarce dollars for all its international transactions. The takeover of billions of dollars in private pension funds, among other moves, led Argentines to pull the equivalent of nearly $23 billion, much of it in dollars, out of the country last year.

China is also seizing opportunities in Latin America when traditional lenders over which the United States holds some sway, like the Inter-American Development Bank, are pushing up against their limits.

Just one of China’s planned loans, the $10 billion for Brazil’s national oil company, is almost as much as the $11.2 billion in all approved financing by the Inter-American Bank in 2008. Brazil is expected to use the loan for offshore exploration, while agreeing to export as much as 100,000 barrels of oil a day to China, according to the oil company.

The Inter-American bank, in which the United States has de facto veto power in some matters, is trying to triple its capital and increase lending to $18 billion this year. But the replenishment involves delicate negotiations among member nations, made all the more difficult after the bank lost almost $1 billion last year. China will also have a role in these talks, having become a member of the bank this year.

In February, China’s vice president, Xi Jinping, traveled to Caracas to meet with President Hugo Chávez. The two men announced that a Chinese-backed development fund based here would grow to $12 billion from $6 billion, giving Venezuela access to hard currency while agreeing to increase oil shipments to China to one million barrels a day from a level of about 380,000 barrels

Mr. Chávez’s government contends the Chinese aid differs from other multilateral loans because it comes without strings attached, like scrutiny of internal finances. But the Chinese fund has generated criticism among his opponents, who view it as an affront to Venezuela’s sovereignty. “The fund is a swindle to the nation,” said Luis Díaz, a lawmaker who claims that China locked in low prices for the oil Venezuela is using as repayment.

“This is China playing the long game,” said Gregory Chin, a political scientist at York University in Toronto. “If this ultimately translates into political influence, then that is how the game is played.”

He characterizes Greece's banking sector as being "basically sound" and "in considerably better condition" than those in other EU countries and in the United States. He notes that Greece was the first EU country to provide a government guarantee for personal savings up to a total of €100,000.

now the European Commission has instigated disciplinary proceedings, because Athens has exceeded the euro zone budget deficit limit of 3 percent for the third time in a row. The results of audits carried out by Brussels look very different from the information in Livadas's glossy brochures. In EU statistics, Greek government debt is listed as amounting to 94 percent of the country's gross domestic product. Italy is the only other euro zone country which has a higher level of government debt. Greece also has the lowest credit rating of all the euro zone countries. It has to finance its government debt under terms which are worse than for any other euro zone country, with the exception of Malta.

Educated young people from the middle class have little prospect of finding employment, despite being well qualified, and are forced to take casual jobs to make ends meet. As a result, many young Greeks are forced to live with their parents until they are well past the age of 30. The anger of the "€700 generation" -- as the young people are known -- over their situation exploded last December in weeks of rioting throughout the country.

Georgios Provopoulos, the governor of the Bank of Greece, the nation's central bank, warned his countrymen against "self-satisfaction" and spoke of a looming danger of national bankruptcy. And Greece has still to feel the full effects of the global recession.

"The negative factors you see here are all leftovers from the past," says one EU diplomat, adding that most of them are homegrown. Economic experts are anxiously waiting to see what's going to happen this summer. They fear there could be a decline in the tourism sector, one of the most important pillars of growth in the Greek economy, accounting for 17 percent of gross domestic product. The volume of tourist bookings from the United States is reported to have dropped by up to 50 percent. The number of British vacationers, some 3 million annually in the past, alongside 2.3 million Germans, is expected to shrink by up to 30 percent.

The situation of banks that invested in Eastern Europe and in the Balkans is uncertain. Greek financial institutions invested billions of euros in bank takeovers or in setting up their own branches in Romania, Bulgaria, and Serbia. Given that the value of the national currencies in some of those countries has fallen dramatically, what were originally seen as attractive investments in developing economies could well turn out to be huge losses.

That's what the crisis looks like in Greece. "Nobody wants to see it, but everybody is afraid of it," says Kalliope Amyg, a young political scientist. "The country is dancing on a volcano."

Baitullah Mehsud, the man accused by Pakistani and U.S. intelligence of masterminding the assassination of former Prime Minister Benazir Bhutto. Although Mehsud is the nominal chief of the TTP, he has plenty of rivals, even in his native South Waziristan. Two major tribes populate South Waziristan: the Mehsuds and the Wazirs. The Wazirs dominate Wana, the main city in South Waziristan. But the ranking Taliban leader from the Wazirs, Maulvi Nazir, is a darling of Pakistan’s military establishment.

You’re probably scratching your head right now, a bit confused. You see, Nazir is only interested in fighting U.S., Afghan, and NATO forces across the border. He is not part of the TTP and has not been involved in the wave of violence sweeping Pakistan of late. Therefore, in the minds of Pakistani generals, he is a “good” Taliban versus Baitullah Mehsud, who is, in their mind, unequivocally “bad.” That’s just one example of Talibs living in Pakistan who do not necessarily come under the title “Pakistani Taliban” or the “Tehrik-e-Taliban Pakistan” moniker.

In Swat Valley, where Islamabad recently signed a peace treaty with the Taliban, the fissures among the militants are more generational. Swat, unlike South Waziristan, is part of NWFP and shares no border with Afghanistan. In the late 1980s, a group calling itself the Tehrik-e-Nifaz-e-Shariat-e-Mohammadi, TNSM or the Movement for the Establishment of the Law of Mohammed, launched a drive to impose Islamic law in Swat and its environs.

After the U.S. invasion of Afghanistan, the leader of TNSM, Sufi Mohammed, organized a group of madrasa students and led them across the border to combat the Americans. But only Sufi Mohammed returned. The legions who had followed him were “martyred,” or so he told their parents. Sufi Mohammed was thrown in jail by then president and Army chief Pervez Musharraf, and so he named his son-in-law, Maulana Fazlullah, to run TNSM in his stead. But Fazlullah had wider ambitions and assembled a several-hundred-man army vowing to fight the Pakistani government. The senior leadership of TNSM soon disowned Fazlullah, who happily embarked on his own and is now Mehsud’s deputy in the TTP. For the past year and a half, Fazlullah’s devotees have bombed, kidnapped, and assassinated anyone who’s dared to challenge their writ in Swat.

By 2008, Sufi Mohammed looked like a moderate in comparison to his son-in-law. So the Pakistani government asked him to mediate. Perhaps he could cool Fazlullah down. The recent treaty you’ve heard about in Swat is between the Pakistani government and Sufi Mohammed, who has pledged to bring Fazlullah on board. So far, the treaty has held, unless you count the soldiers who were killed by Fazlullah’s Talibs for not “informing the Taliban of their movements.”

The U.S. government supported all this, but asked Mr. Sharon for two more things. First, that he remove some West Bank settlements; we wanted Israel to show that removing them was not impossible. Second, we wanted him to pull out of Gaza totally -- including every single settlement and the "Philadelphi Strip" separating Gaza from Egypt, even though holding on to this strip would have prevented the smuggling of weapons to Hamas that was feared and has now come to pass. Mr. Sharon agreed on both counts.

On April 14, 2004, Mr. Bush handed Mr. Sharon a letter saying that there would be no "right of return" for Palestinian refugees. Instead, the president said, "a solution to the Palestinian refugee issue as part of any final status agreement will need to be found through the establishment of a Palestinian state, and the settling of Palestinian refugees there, rather than in Israel."

On the major settlement blocs, Mr. Bush said, "In light of new realities on the ground, including already existing major Israeli populations centers, it is unrealistic to expect that the outcome of final status negotiations will be a full and complete return to the armistice lines of 1949." Several previous administrations had declared all Israeli settlements beyond the "1967 borders" to be illegal. Here Mr. Bush dropped such language, referring to the 1967 borders -- correctly -- as merely the lines where the fighting stopped in 1949, and saying that in any realistic peace agreement Israel would be able to negotiate keeping those major settlements.

On settlements we also agreed on principles that would permit some continuing growth. Mr. Sharon stated these clearly in a major policy speech in December 2003: "Israel will meet all its obligations with regard to construction in the settlements. There will be no construction beyond the existing construction line, no expropriation of land for construction, no special economic incentives and no construction of new settlements."

Ariel Sharon did not invent those four principles. They emerged from discussions with American officials and were discussed by Messrs. Sharon and Bush at their Aqaba meeting in June 2003.

They were not secret, either. Four days after the president's letter, Mr. Sharon's Chief of Staff Dov Weissglas wrote to Secretary of State Condoleezza Rice that "I wish to reconfirm the following understanding, which had been reached between us: 1. Restrictions on settlement growth: within the agreed principles of settlement activities, an effort will be made in the next few days to have a better definition of the construction line of settlements in Judea & Samaria."

Stories in the press also made it clear that there were indeed "agreed principles." On Aug. 21, 2004 the New York Times reported that "the Bush administration . . . now supports construction of new apartments in areas already built up in some settlements, as long as the expansion does not extend outward."

n recent weeks, American officials have denied that any agreement on settlements existed. Secretary of State Hillary Clinton stated on June 17 that "in looking at the history of the Bush administration, there were no informal or oral enforceable agreements. That has been verified by the official record of the administration and by the personnel in the positions of responsibility." These statements are incorrect. Not only were there agreements, but the prime minister of Israel relied on them in undertaking a wrenching political reorientation -- the dissolution of his government, the removal of every single Israeli citizen, settlement and military position in Gaza, and the removal of four small settlements in the West Bank. This was the first time Israel had ever removed settlements outside the context of a peace treaty, and it was a major step.

It is true that there was no U.S.-Israel "memorandum of understanding," which is presumably what Mrs. Clinton means when she suggests that the "official record of the administration" contains none. But she would do well to consult documents like the Weissglas letter, or the notes of the Aqaba meeting, before suggesting that there was no meeting of the minds.