Cover story in Issue 21, February 2, 2009 of The Jerusalem Report. To subscribe to The Jerusalem Report click here. Two weeks into the war in Gaza, international pressure on Israel to stop the fighting mounted. The large-scale Israeli air, sea and ground offensive had left over 750 Palestinians reported dead, more than 3,000 injured and a looming humanitarian crisis. Israel had suffered 14 dead and hundreds injured in close urban combat and Hamas rocket fire on Israeli civilians. According to Palestinian estimates, about half the Palestinian casualties were non-combatants, with over 40 killed when Israeli shells returning militant fire struck a U.N. school in the Jabaliya refugee camp, where civilians from the surrounding area had taken shelter. At United Nations headquarters in New York, the U.S., which up till then had been giving Israel a free hand to "finish the job," seemed to change tack, signaling that it would no longer block efforts to formulate a cease-fire resolution. The British delegation quickly produced a draft, and on January 8, the 13th day of the war, the U.N. Security Council passed a resolution calling for an immediate halt to hostilities. Resolution 1860, however, failed to address basic Israeli and Hamas war aims. Israel wants new arrangements on the ground to prevent future arms smuggling into Gaza across the border with Egypt; Hamas wants to emerge from the conflict with enhanced international recognition as the legitimate rulers of Gaza. For the Islamist organization that seized power in a June 2007 coup, opening the border crossing points is not only a question of the free flow of goods; it is also an expression of sovereignty. But the resolution did not so much as mention Hamas; nor did it detail credible plans to stop the smuggling. Not surprisingly, both sides rejected it and the fighting continued. On the Israeli side, thousands of reservists massed on the border ready to cross into Gaza and ratchet up the pressure on Hamas; for its part, Hamas hoped that as they moved deeper into Gaza City and other built-up areas, Israeli forces would be sucked into a guerrilla war they couldn't win, and be forced to withdraw empty-handed. There were three strands of opinion in the Israeli war cabinet: Prime Minister Ehud Olmert, Defense Minister Ehud Barak and Foreign Minister Tzipi Livni all wanted a deal that would stop Hamas rocket fire and prevent a future Hamas military build-up; but Livni hoped to get it through arrangements with Egypt and other major players, ignoring Hamas and relying largely on the deterrent effect of the Israeli operation; Barak favored a deal with Hamas mediated by Egypt; while Olmert harbored hopes of exerting enough military pressure to break the Islamists' hold on power in Gaza. The government moved on two parallel planes: Intensifying the military pressure on Hamas, while seeking a credible cease-fire package mainly through Egyptian mediation. On the ground, Israeli commanders detected signs of Hamas distress. Its paramilitary organization had lost over 300 men in the fighting, some of its companies had been wiped out and there were cases of fighters deserting or refusing to carry out orders. After the U.N. Security Council resolution, however, there was a question mark over how long the United States would continue to allow Israel the freedom of action it needed to achieve its military objectives. That crucial variable in the complex international equation took on added significance with the imminent inauguration of Barack Obama, a leader with very different views than his predecessor on how to pacify the Middle East. Are the Bush years in which Israel had been given a virtual carte blanche in the fight against terror about to come to an abrupt end? And to what extent had the impending change at the top been a factor in the American decision not to veto the Security Council resolution? According to some reports, Gen. Jim Jones, Obama's incoming national security adviser, was deeply involved in the U.N. turnaround. Obama himself signaled that under him, Israel would likely face tougher demands to alleviate the humanitarian crisis in Gaza now and over conditions in the West Bank later. "The loss of civilian life in Gaza and in Israel is a source of deep concern to me," he declared just two days before the U.S. policy shift. In addition to the moral imperative, there was also a strategic dimension to what seemed to be shaping up as a more nuanced American Middle East approach. On the one hand, it was clear that by defeating Hamas, Israel would be striking a blow against the region's radical, anti-Western Iranian-led axis. But scores of angry demonstrations across the Middle East pointed to an inherent paradox in the use of force, one that had bedeviled American efforts in Iraq and threatened to counteract Israel's military successes in Gaza: The harder Israel hit the radicals, the more it tended to radicalize the region. Finding the right balance between carrot and stick in the attempt to contain the anti-Western Islamists is almost certain to be very near the top of the Obama foreign policy agenda. Indeed, the potential regional fallout from the Gaza war is huge. Already it has heightened longstanding tensions between radical Shi'ite Iran and moderate Sunni Egypt. Increasingly angry region-wide demonstrations against Israel put pressure on radical and moderate regimes alike to act. Muslim Turkey, viewed by Israel as a strategic partner, adopted a surprisingly tough anti-Israel stance and one of the key open questions was whether Iran would at some point try to open a second front against Israel through its Hizballah proxy in Lebanon. On the other side of the regional equation, the Egyptian government, despite vociferous regional and domestic abuse, maintained a consistently critical attitude towards Hamas. And as the war moved into its third week, it was clear that the key players in any solution would be the U.S. and Egypt, and the main potential spoiler, Iran. When Obama enters the Oval Office, the Gaza crisis and its consequences will provide a first reality test for the policy papers prepared by his transition team and the ideas floated by Washington think tanks that have the incoming president's ear. The common denominator in most of these is a clear preference for a wide regional rather than a narrow Israel-Palestinian focus. Eytan Gilboa, an expert on American policy at Bar-Ilan University's BESA Center for Strategic Studies, talks about an "Iran-first approach." "Obama sees Iran as the key to what is happening with Asad in Syria, the Hizballah in Lebanon and Hamas in Gaza. He believes in going straight to the boss, to the country that is financing and stage-managing it all," he tells The Report. Gilboa argues that as soon as the Gaza situation stabilizes, Obama is likely to put the Palestinian issue on the back burner, and concentrate on unconditional dialogue with Iran aimed at persuading it to suspend its nuclear weapons' program. Success, which Gilboa sees as extremely unlikely, would create better conditions for Arab-Israel peacemaking; failure would set in motion heavier and more widely backed sanctions on Iran. But the ferocity of the war in Gaza and the mounting civilian casualties have clearly made a deep impression on Obama and may have changed his priorities. In an interview on ABC television, he said he would tackle the Israeli-Arab conflict from day one, and seek the role of an honest broker that both parties could trust to bring about a fair and just outcome. "I think an Obama Administration, if we do it right, can provide that kind of interlocutor," he declared, suggesting that he would be more "evenhanded" than the Bush administration had been. Gilboa expects Obama to adopt a more multilateralist approach to foreign policy than Bush did, trying to advance American interests through broad international consensus. The United States., he says, will reverse its deprecatory attitude to the U.N. and try to use the world body as an instrument for achieving U.S. foreign policy goals by consensus. He sees the January 8 Security Council resolution on Gaza as the forerunner of the new policy, and says he expects Israel "to have a hard time in the U.N." when Susan Rice, the driving force behind the new American approach to the world body, takes over as Obama's U.N. Ambassador. But, when the chips are down, Gilboa does not expect Obama to tie Israel's hands in fighting Hamas terror, because, he says, smashing Hamas serves Obama's Iran- oriented policy. "The more Iran's proxies, like Hizballah and Hamas are hit, the easier it becomes to hold a fruitful dialogue with Iran. Because if, like Iran, you try to build an empire, and it takes blow after blow, your room for maneuvering declines," he insists. From an Israeli point of view, the key to an end to the fighting in Gaza lies in a solution to the problem of weapons' smuggling through hundreds of tunnels interspersed along the 14-kilometer Philadelphi route on the Egypt-Gaza border. Many have been bombed with bunker-busters from the air or collapsed by ground forces. But they could easily be rebuilt for future arms trafficking unless there is a new border regime that renders the tunneling ineffective. One of the ideas is to have a three to five kilometer wide no-go zone on the Egyptian side of the border; another is to put in a deep concrete moat to make tunneling physically impossible; and there has also been talk of deploying international forces on one or both sides of the border. Israeli analysts, however, tend to dismiss the idea of international peacekeepers. Gilboa argues that there is no way multinational or NATO forces would take the risk, especially since Hamas has already threatened to target them. And Yoram Meital, chairman of Ben-Gurion University's Chaim Herzog Center for Middle East Studies and Diplomacy, says even if international forces agreed, Egypt would not allow them to deploy along its side of the border. "They see it as a blatant infringement of their sovereignty," he explains. Indeed, in Meital's view, the Egyptians will be willing and able to establish an effective border regime to stop the overland smuggling. "They will be ready to accept significant American or German technological aid to help them police the border, and to cooperate on intelligence with Israel and the United States," he tells The Report. The Egyptians, however, contend that much of the weapons' smuggling into Gaza has been by sea, implying that Israel shares part of the blame, since patrolling the Gazan coast is its responsibility. This position also gives Egypt an alibi if weapons keep getting through after they tighten the border regime. Nevertheless, Meital does not doubt Egypt's sincerity and he slams Israeli politicians and analysts who have accused Egypt of deliberately arming Hamas to bleed Israel. "The current crisis has shown these charges to be absolutely false, and it is absurd to conclude that if Egypt fails to prevent smuggling, it is somehow in cahoots with Hamas," he declares. The Egyptian government's dilemma is that while it feels seriously threatened by Hamas-style radicalism, given the proximity of Gaza and the power of its own Islamist Muslim Brotherhood opposition, it does not want to be seen as buttressing Israeli rather than its own interests. "For Mubarak and his government what is happening in Gaza constitutes a significant threat to Egypt's national security. The war is being waged on its border, and they fear it could spill over. Worse, it is inflaming segments of Egyptian public opinion, which puts tremendous pressure on the regime. And the upshot is that they see themselves paying a price for Israel's assault on Gaza," Meital avers. But although Egypt has taken a lot of flak from Iran and its radical backers, it has not wavered in its public criticism of Hamas, which it blames for the current fighting and the earlier breach between Hamas and the Palestinian Authority. Still, says Meital, the Egyptian government prefers to talk to Hamas, so as not to isolate the Islamist organization altogether, and push it into sole dependence on Iran. But then again, it will not open the Rafah crossing between Egypt and Gaza, without the presence of rival Palestinian Authority, in order not to imply any Egyptian recognition of Hamas sovereignty. Egypt's geographic location and its relations with both Israel and Hamas make it the almost indispensable mediator in the current situation. Both sides have been sending emissaries to Cairo, in an effort to work out new arrangements on the ground to end the fighting. But Meital has a final caveat: If Israeli troops backed up by thousands of reservists launch a much wider ground operation and regional protests intensify, the Egyptian government could feel forced to turn its back on Israel, and Israel could find itself winning the war, but without a partner to negotiate the peace. The main beneficiary of the region-wide protests against the war so far has been Egypt's bitter foe, Iran. "For the Ayatollahs, it is a gift from heaven. It's exactly what they have been trying to do in the region for the past 30 years. The more struggle, tension, bloodshed, war there is, the more it serves their interest in inflaming passions in the region, mobilizing people to take action against Israel and demonizing the Jewish state," says Menashe Amir, chief editor of the Foreign Ministry's Persian web-site. Amir argues that Iran's support for Hamas is also directed against Egypt. "It's part of Iran's ideology, which asserts that the peoples of the Middle East want to destroy Israel, but are held back by moderate regimes, rotten to the core, which serve what they call the 'international arrogance' (the U.S.-led West) and which must be toppled," he says. Yet despite the rhetoric, Iran stopped short of opening a second front. And when, on the 13th day of the war, Katyusha rockets fired from Lebanon hit an old-age home in Nahariya, Hizballah was quick to deny responsibility. According to Amir, Hizballah had its own reasons for staying out of the fray: the June 7 elections in Lebanon, and the memory of its 2006 war with Israel. "Hizballah knows dragging Lebanon into another war with Israel would hurt its chances of gaining power in Lebanon through the ballot box," he says. More importantly, Iran also has good reason to hold back: "The Iranians don't want to risk losing Hizballah's power to deter Israel from taking military action against their nuclear program. The nuclear program is much more important for them than what is happening now in Gaza," he declares. The Gaza war has reshuffled the wider Middle Eastern deck and exposed the fragility of regional order. For Israel, the strategic question is whether it brings a two-state solution with the Palestinians closer by weakening Hamas or pushes it further by radicalizing the region. In all of this, the key player is almost certain to be the eloquent, energetic new American president. And if Security Council Resolution 1860 and his first guarded comments on the Gaza situation are anything to go by, for better or for worse, Barack Obama will be pushing all the players, including Israel, hard for change. â€¢ Cover story in Issue 21, February 2, 2009 of The Jerusalem Report. To subscribe to The Jerusalem Report click here.