Martin Indyk seems to be a happy camper these days - or at least what one could call "cautiously optimistic." This is not merely because his recently released book, Innocent Abroad: An Intimate Account of American Peace Diplomacy in the Middle East, just came out in Hebrew, in time for Hebrew Book Week. A more likely explanation for his good cheer is that Barack Obama is holding the White House reins. And the new US president is keen on picking up where Indyk's former boss, Bill Clinton, left off, peace-process-wise. Before it exploded, literally and figuratively, in everyone's face, that is. And before George W. Bush took over, with a very different approach to conflict-solving from that of his predecessor. As someone whose self-stated aim since the Yom Kippur War has been "to devote my life to trying to help Israel achieve security through peacemaking," Indyk - currently director of the Saban Center for Middle East Policy at the DC-based Brookings Institution, and former US ambassador to Israel (from April 1995 to September 1997, and from January 2000 to July 2001) - was anything but pleased with Bush's belief in transforming the Middle East through "regime change and democracy promotion." This is not to say that the 58-year-old, Australian-born, naturalized American Jew - who also served as director of Near East and South Asian affairs at the National Security Council and as a key member of secretary of state Warren Christopher's Middle East peace team - considered Clinton's strategy successful. On the contrary, Indyk not only acknowledges its failures, but says he is still grappling with them on a personal level. In his book, which he describes as "part memoir, part analysis and part history," Indyk details the complexities involved in American attempts to bridge gaps between Israel and its Arab neighbors. In an interview with The Jerusalem Post, he expounds on this, explaining what he thinks will be the task of the current cast of characters and the critical role of US diplomacy in the mix. Egyptian President Hosni Mubarak responded to Prime Minister Binyamin Netanyahu's speech at Bar-Ilan's Begin-Sadat Center by saying that demanding of any Arab leader to recognize Israel as a Jewish state aborts the peace process. Given your diplomatic dealings with Mubarak, what do you think about that statement? It's a pity that this issue has been raised in this way, because of course Israel is the state for the Jewish people. I mean, if it's not that, what is it? In a two-state solution, with one of those states for the Palestinians, what is the other one for? So, while Israelis are trying to get a clear understanding of what exactly the Arabs are recognizing, the Arabs - whose narrative enables them to accept Israel as a state in general - do not accept the Zionist narrative. They therefore find it very hard to accept that kind of add-on to the requirement that they recognize Israel. They don't accept that Israel was created, on the backs of the Palestinians, as an answer to the problem of the Holocaust - the very narrative that Obama talked about in his speech. But another way of looking at this has been articulated by [former Ariel Sharon adviser] Dubi [Dov] Weisglass, who argues that it's up to Israel to define itself; it doesn't require others to say that it is a Jewish state. And when Arabs don't use those exact words, it is seen as an indication that they don't accept Israel. Yet Egypt has been at peace with Israel for over 30 years. So, it's really an unfortunate diversion that leads to a cul-de-sac, from which there's no way out for either side. I wish there was a way to put it aside for the time being, and deal with it over centuries. There are practical matters that need immediate attention, particularly the need to resolve the conflict between Israelis and Palestinians. In this context, it's much more important to get the Palestinians to give up the right of return than to say that they accept Israel as a Jewish state. Netanyahu, too, mentioned the Holocaust in his speech, but pointed out that Israel wasn't born "as an answer" to it, but far earlier. Given the way that radical Islam and the reawakening of classical European anti-Semitism complement one another, do you think that it's enough for Israel to have what you call the "self-confidence" to define itself, and not care how others do? Israel is both highly self-confident and deeply insecure. It's an ambivalence that is at the heart of the Israeli character, and the product of both Israel's current circumstances and Jewish history. Jewish history breeds a deep insecurity in every Jew. Now, with [Iranian President Mahmoud] Ahmadinejad trying to acquire nuclear weapons, it just reinforces the sense that, in every generation, the Jewish people find themselves threatened. On the other hand, Israel is strong. Regardless of what happens with Iran - and it remains to be seen how the events there will unfold - Israel is the strongest military power in the region. It has a robust economy - one that is surviving the recession far better than that of America. It has a strong alliance with the most important superpower in the world, the United States, and deep and lasting relationships with Europe, Russia, China and India. In other words, Israel has a lot going for it, and this ambivalence between feeling strong and weak at the same time is a problem for Israelis. After serving here, I became convinced that, in order to be a good ambassador in Israel, you need to be a psychiatrist, not a diplomat. You talk about Israel's ambivalent self-perception, on the one hand, and its "deep and lasting relationships" with countries like Russia and China, on the other. Yet both these countries supply weapons to Iran. When you consider that Obama's position is to engage with the ayatollah-led regime, and now is adopting a hands-off approach to the protesters, isn't Israel more hindered now than ever, in terms of confronting the nuclear threat? The biggest danger now is that Iran will purchase S-300 air-defense missiles from Russia, which would make an Israeli strike on Iran's nuclear facilities much more complicated. But, as I understand it, because of the relationship between Israel and Russia, the Russians are deliberately delaying the delivery of those missiles. This is a very good example of the way in which Israel's relationships today make a difference - especially when you consider that the Russians used to provide arms to Israel's enemies in the Arab world. Also, Israel is heavily dependent on the US, militarily, politically and economically. With that dependence come certain obligations. If you're going to depend on the US, you're going to have to take American interests into account. And America now defines resolving the Arab-Israeli conflict as a national interest. This, by the way, started with [former US president] George W. Bush, who saw it in America's national interest to resolve the Palestinian problem. The point is that when America has a national interest, Israel has to take it into account. Has Israel not been taking that into account? Didn't Netanyahu's speech indicate that he is? Yes, I think his speech was an indication of his taking it into account. If he had his druthers, he'd "ruther" not involve himself in a negotiation that led to the creation of a Palestinian state. Not because I think he is against it. Bibi's a pragmatist, not an ideologue. But he has a party that has a lot of ideologues in it these days, because the pragmatists left for Kadima with [former prime ministers] Ariel Sharon and Ehud Olmert, who believed in creating a Palestinian state. So Bibi finds himself in a politically awkward situation. On the one hand, he's got the hawks in his [Likud] party, as well as parties to the right of Likud. On the other, he's got an American superpower on which he's particularly dependent, when it comes to dealing with the Iranian threat. And that superpower is saying, "It's in our interest to establish a Palestinian state alongside Israel." So, he's got to walk between the raindrops. And the problem with walking between the raindrops is that you get wet. In your book, you are critical of Bush's change of emphasis in Mideast diplomacy. Here you refer to the "pragmatists," who followed Sharon and Olmert in a positive light. Yet it was that very camp that had close ties with Bush... My criticism of Bush is that he reached the conclusion, very early on in his presidency, that no good was to be served by trying to pursue peace between Israel and its Palestinian and Arab neighbors. Instead, he tried a different way of transforming the Middle East - not through peacemaking, but through regime change and democracy promotion. After seven years of that exercise, which ended up in all sorts of problems I won't go into here, he came around, and launched the Annapolis process. My problem with him is that if he'd done this from the beginning of his presidency, rather than in his last year, a lot of things could have been different. But for years, he walked away from it, and left the Israelis and Palestinians to their own devices - which resulted in Palestinian suicide bombings and Israeli responses - and thousands of people were killed. In the process, the whole edifice of peacemaking went up in flames. What we were left with was a wasteland, and now, neither side has any trust in the intentions of the other. On the Palestinian side, we've got a divided polity, with Hamas, which has no interest in making peace with Israel, in control of Gaza, and a very weak Palestinian Authority that doesn't have the ability to control the territory from which Israel might withdraw. It is much harder now as a consequence, and I think that's a shame. But I'm very glad that Obama is committed to trying to resolve the problem, because if we don't achieve a breakthrough, what we're going to end up with is Hamas in the West Bank, as well as in Gaza - and Israel will end up with two terror statelets on its borders. That will not be good for the future of the Jewish enterprise. As you describe in your book, it's not as though things were so hunky-dory at the end of Bill Clinton's presidency, either. What difference would it have made had it been Obama, rather than Bush, succeeding him? Obama's priority would have been to stop the violence. Once the intifada broke out in October, that's what Clinton should have been focusing on, rather than trying to make a deal. And that's what Bush should have been focusing on, as well. I was ambassador at the time, and worked closely with Sharon, who was the prime minister. Sharon wanted the American president to intervene to get Arafat to stop the violence, because he understood that Israeli force would not do it. He realized that Arafat used Israeli retaliation as a way of building sympathy for the Palestinians in the world of public opinion. This is why he decided not to retaliate for the [June 1, 2001] Dolphinarium bombing in Tel Aviv, in which 21 people were killed. Hoping that the US would start cracking down on perpetrators of violence on the Palestinian side. He said, "There is wisdom in restraint." But Bush wasn't interested. George Mitchell was here then - a product of the Clinton administration, who had set up the commission to look into the origins of the intifada and make recommendations as to how to stop it. Ironically, the Mitchell recommendations were for Israel to stop settlement activity, including natural growth, and for the Palestinians to stop the violence and start dismantling the infrastructure of terror. I went to Sharon - I didn't have instructions from Bush, because, as I said, he wasn't interested - and I said, "The president wants you to accept these recommendations." Sharon was so concerned about keeping sweet with the president - not allowing any daylight to show between them - that he said, "OK, we'll talk to [housing minister Natan] Sharansky, and see what it means, and how to do it." He then told me, in front of Sharansky, "If the president wants this, I'm ready to do a moratorium for six months on settlement activity, provided that the US gets the Palestinians to stop the violence and dismantle the infrastructure of terror." Sharansky was apoplectic. He said, "How can you do that?!" And Sharon answered, "[Menachem] Begin did it; I can do it." Had we had a president at that time who was ready to take advantage of this situation, he could have stopped the violence at that point by getting Arafat to live up to his commitments. How could he have stopped the violence and gotten Arafat to live up to his commitments? There were two plans on the table that both sides had accepted - the Mitchell recommendations and the George Tenet cease-fire plan. The Israelis were ready to do their part, if the Palestinians were ready to do theirs. America's role in those days would have been to get the Palestinians to do their part. Sharon's critics on the Right argued that Bush would not have pressured him into withdrawing from Gaza - yet he did it anyway. Is that true? Absolutely. Sharon feared that, sooner or later, the US and the international community would try to impose the '67 borders on Israel. That was his nightmare. And his big concern was protecting his settlements - those he had built on the ridge line - the high ground - of the West Bank. The whole idea of disengagement from Gaza was his way of making a concession in Gaza that would enable him to keep the high ground in the West Bank. Just as Begin gave up the Sinai to keep the West Bank, Sharon was going to give up Gaza in order to keep the high ground in the West Bank. His right-wing critics never really understood what he was doing. They thought that evacuating settlements in Gaza was a precursor to evacuating settlements in the West Bank. What Dubi [Weisglass] went to Washington to negotiate was an American commitment to accept not only the settlement blocs, but to accept Sharon's settlements, further east. Sharon was prepared to do a deal with Bush, in which he'd give up Gaza, and Bush would accept his settlements in the West Bank. That was too far for Bush to go, so they never did that deal. The mistake, both for Sharon and for Bush, was that Sharon wanted to negotiate this with the US, not with the Palestinians. Similarly, Netanyahu wants to negotiate the establishment of a Palestinian state with the US, not with the Palestinians. In his speech, he talked about international guarantees that the state would be demilitarized - not a commitment from the Palestinians. There is this view among the Right in Israel that the deal needs to be made with the superpower, not with this weak entity. And then what happens is that you get into a situation like unilateral withdrawal from Gaza, and there's no commitment from the Palestinians. There's no way you can hold Palestinians to a commitment - not to smuggle weapons, for instance - they never made. The withdrawal from Gaza wasn't "territory for peace," it was "territory for nothing." And it will be the same if you try to negotiate over the settlement blocs with the US, because it's the Palestinians whom you've got to coexist with. It's from them that you've got to get the commitment. Do commitments from the Palestinians ever really count? A commitment counts, because it gives the US something to insist on. That's the role of the US - not to make the commitments, but to get the Palestinians to live up to theirs. That is what the Right in Israel is blind about. It keeps insisting that the Palestinians won't live up to their commitments anyway, so there's no point in getting commitments from them. But the Right is wrong. Given your many dealings with Arab leaders, which you describe in great detail in the book, do you believe there's really hope for peace between Israel and cultures that place such an emphasis on personal honor? Is it possible for democracies to make deals with countries whose sense of truth - and time - are so different? It's certainly very difficult. Part of why I titled the book Innocent Abroad was that we Americans tend to have no time in general, and no time in particular for learning about the differences in culture that exist. Israel is very much like America in that sense. We have common values. We arise from a common base of Judeo-Christian ethics or European civilization. So we understand each other much better, but the Arab societies are very different. You see it in the negotiations. Israelis are terrible negotiators with Arabs, because Israelis don't have a bazaar mentality. You talk about this as a cultural misunderstanding - as though it's a question of knowing how to negotiate, rather than viewing the Arab war against Israel as having strong ideological and religious motivation. In such a situation, can learning about how to communicate culturally even make a dent? Of course, there are very real issues at stake - including, not so much ideological issues, but competing narratives which both sides hold very strongly. And that has to be taken into account, as well. When you say "both sides," are you referring only to Israel and the Palestinians, or to the West and radical Islamists the world over? I think it's a mistake to conflate them. Why? Because I don't think it's an accurate way of understanding Israel's situation. By viewing the conflict as one between civilizations, Israel would miss out on very real common interests that are emerging between itself and those in the Arab and Muslim world who feel deeply threatened by Islamic extremists and jihadist radicalism. It's very important not just to understand culture, but to understand that the other side is not monolithic, and shouldn't be treated as such. Ultimately Israel's a small country living in a broadly hostile environment, and the wisdom of its leaders to identify with the common interests on the other side and try to build on them is part of the reason they triumph in the face of this adversity. It was, after all, Begin who made peace with Egypt's Anwar Sadat, understanding that an Egyptian leader had an interest in doing so. And that served Israel's interests very well. What is the purpose of your book, then? It's part memoir, part analysis and part history. I call it an "intimate account" - an insider's view of what happened the last time the US sallied forth into the bazaars of the Middle East and tried to change this part of the world for the better. It's a salutary tale. At the same time, I try to draw messages from what was a very personal journey for me, which began when I first came to Israel, and got caught by surprise, like the rest of the country, in the 1973 Yom Kippur War. At that moment, I decided I was going to devote my life to trying to help Israel achieve security through peacemaking, particularly through understanding America's role. I was fortunate enough to be present - as an insider - at the moment when it looked like Israel was about to achieve a comprehensive peace. It's hard for people today to imagine that it was possible. But it was very easy in those days, in the 1990s, to imagine that it was possible. And in the first couple of years, we made considerable progress. Then it started to go wrong after [former prime minister Yitzhak] Rabin's assassination. Are you saying that had he not been assassinated, the script would have played out differently? It's a question I ask myself a lot. It's possible that he would have lost the elections that were coming up, and that the situation would have changed anyway. We can't know. But what I see, and try to capture in the book, is that, by 1995, before the assassination, things were starting to gel between him and Arafat. He had the ability to deal with Arafat in a way that moved Arafat decisively away from violence into a place different from where he was when he went to sign the Oslo Accords [in 1993]. So, one of the lessons I try to bring out is that an American president cannot achieve peace on his own. He needs a Begin; he needs a Sadat; he needs a King Hussein. He needs leaders, on both sides, to break the mold of conflict and take courageous steps. As [then foreign minister] Shimon Peres said to me: "History is like a horse that gallops past your window. The true act of a statesman is to decide to jump from the window onto that galloping horse." What an American president can do is provide a safety net, so that if the leader jumps and misses the horse, he won't break all his bones. That is the essence of leadership on both sides. Rabin had the leadership; Arafat did not. So, I took the failure as a personal one. And it is you, therefore - not just the American administration - who was the "innocent abroad?" Yes. Usually, when someone is disillusioned with a path he has followed, and feels that reality has slapped him in the face, he changes his outlook somewhat. In your case, the opposite seems to be the case - that this has only served to reinforce your views. Is that correct? I spent a long time trying to come to terms with what went wrong. But you're right: Ultimately, my conviction that Israel's long-term survival depends on its coming to terms with its neighbors and its neighbors coming to terms with it. And that diplomacy - particularly American diplomacy - has a critical role to play. Finally, with today's cast of characters - Obama in Washington, Netanyahu in Jerusalem and Mahmoud Abbas in Ramallah - what's your prognosis? As the current events in Iran illustrates, you can never tell what is going to happen. Something always turns up. It's usually bad. But occasionally, you get a Sadat who comes to Jerusalem. Why did that happen? Because an American president, Jimmy Carter, went off to Damascus, to try to get the Syrians involved in the Geneva Conference, and Sadat looked at this, and saw how the Syrians were going to be able to veto and constrain his desire to make peace, and he said, "The hell with that; I'm going to Jerusalem to deal with Israel directly." Then, Bill Clinton went off to Damascus to try to make peace between Israel and Syria, and Arafat turned up on the White House lawn. When we went off to Syria again, [Jordan's] King Hussein ended up on the White House lawn. So, it's unpredictable. But, if an American president invests his energy, and puts the prestige of his high office and the influence of the United States into the effort, all the leaders in the region will have to recalculate. Then, just maybe, he can get that galloping horse to go past their windows, and put them in a situation where they can jump on it. One thing I do know is that if Bibi Netanyahu decides to be that kind of leader, he can bring the Israeli people with him in a way that Yitzhak Rabin and Shimon Peres and Ehud Barak found very difficult to do, by definition, because they were from the Left, while Netanyahu is from the Right. And there were parts of his speech that seemed to indicate he was prepared to be that kind of leader. But he can't do it on his own, nor will he, unless he's put to the test. And Obama fully intends to put him to the test - as he does to all the Arab leaders. So, we'll see. If you were a betting person, you wouldn't put much money on it. Nevertheless, Obama's determined. He understands that he has to be persistent, and that will require everybody else to change their calculations.

One on One: 'The Right is wrong'

Former US envoy Martin Indyk says there's still hope for ME peace.