The official organs of the Jewish Agency are thrilled and unabashedly gratified at the government's new initiative to start investing in the Diaspora, to "change the paradigm" of the Israel-Diaspora relationship. The agency issued a statement saying it "salutes" Prime Minister Ehud Olmert for his "vision" in the "historic address" he delivered Sunday to the agency Board of Governors meeting in Jerusalem, where he announced the new initiative. The gratitude is real. There is palpable relief among agency officials that the government's new initiative, which could bring hundreds of millions of shekels and much prestige to programs connecting the Diaspora and Israel in the coming years, is being conducted together with the agency, which is seen by an uncomfortably large number of Jews as a politicized and outdated leviathan. The ruling Kadima Party, meanwhile, is keeping the credit for the initiative in its court - perhaps rightly, since Kadima officials are the life-force and political wind behind the new policy. Indeed, Laborite Diaspora Affairs Minister Isaac Herzog's protestations that he's "involved" in the process only serve to demonstrate that he is not leading it. Between the sycophantic agency officials and the tag-along ministers, it is not surprising that some Jewish leaders and Israeli observers see the new initiative as mere politicking, with the prime minister seeking political advantage by saying what he believes American Jews want to hear. In all this skepticism, however, it is important to note the Israeli context of the new discussion, which is indeed historic. In his analysis of the dangers to Jews in modernizing Europe, Theodor Herzl was essentially right. It is hard to escape the fact that in the world about which Zionism theorized - that is, the modernizing states of Europe, Africa and Asia - a vast millennia-old Jewish civilization that still existed when the Zionists met in Basel in 1897, exists no more, having been expelled or butchered by these modernizing societies. It was the sad insight of Zionism that modernity can unleash brutal oppression and unprecedented violence while it offers liberalism and equality. But Herzl did not comprehend the American exception to this rule. If we understand modernization as a cultural move toward individualism and individual rights, America is a country that did not "modernize." Though it was not more perfect than European societies - it had slaves, desperate poverty and a bloody civil war - it was modern from the beginning and did not have to wrench individual rights away from an older feudalism. It was a whole new reality, a new kind of society - and its Jews were a new kind of Jew. Herzl could not know about this new environment, and this blind spot has persisted in the Zionist analysis to this day. As one cabinet minister told The Jerusalem Post recently, he still awaits the inevitable day - "God forbid" - in which America will implode, turn on its Jews and necessitate an absorption of several million refugee Americans. It is important to remember that the personal and family histories of many of Israel's leaders, including this minister, have been a realization of Herzl's dire warnings. And so the magnitude of the change represented by the new discussion at the top echelons of Israel's government is hard to exaggerate. Israel's leaders, not merely in Kadima but also in Labor and Likud, are awakening to the understanding that the classical Zionist analysis must be updated to take into account the peculiar American experience of individualistic identity. American Jewry constitutes over two-thirds of the Diaspora. Israeli leaders are now beginning to understand that to maintain a world Jewish community they must relate to this Diaspora in terms of its values and experiences. There must be a restructuring of the approach to the Diaspora that seeks to make the relationship a vehicle of meaning, of culture, a means of translating between the two major surviving Jewish experiences of the 20th century. Now that the intellectual breakthrough has been made, will Israel's leadership, together with the old leviathan of classical Zionism, the Jewish Agency (here representing the Diaspora), have the wisdom to do it right?