The collective sigh of relief heard in Jerusalem when it was announced that Barack Obama will not present a full-scale peace plan in Cairo next week was totally misplaced. The Netanyahu government (as the Prime Minister's recent visit to Washington so vividly demonstrated) is not attuned either to the new mindset or to shifting US policy in the region. Unless a genuine effort is made to hear both the music and the message emanating from the new American administration, the current coalition will place Israel at the margins of the critical changes now being set in motion in the Middle East and beyond. President Obama is determined - unlike his predecessor - to bring about a two-state reality, with broad regional implications, as part of a remaking of global alliances. His administration's approach is as inclusive as it is nuanced. It favors engagement and dialogue, without minimizing the potent threats presented by Iran and its ideological allies. The construction of such sustainable partnerships cannot proceed without the removal of obstacles that have impeded accommodation in the past. The resolution of the Arab-Israeli conflict, with the Palestinian-Israeli conundrum at its core, is therefore critical to the creation of a stable Middle East. This decidedly 21st-century, value-based and interest-driven approach is unfamiliar to Israeli (and Palestinian) ears. When Obama elaborates on it even further in Egypt on June 4, the eve of the forty-second anniversary of the 1967 war, he will not only be sounding a clarion call for an end to procrastination and foot-dragging, he will also be stating that the time for hard decisions is now. The principles of this emerging policy, if not the detailed plan, are already clearly visible. THE FIRST is the adoption of a comprehensive regional outlook, one which addresses specific disputes from a broad geographic perspective. It follows that the solution to the Arab-Israeli conflict is about to be regionalized, both in theory and in practice. In this context, the Arab League Initiative is viewed as the preferred vehicle for the pursuit of the process, and for the attainment of a durable agreement between Israel and its neighbors. This framework - so summarily ignored during the tendentious Bush era - is belatedly penetrating the radar of Israeli leaders. Ehud Olmert and Binyamin Netanyahu have paid verbal homage to the unquestionably attractive promise it holds. But the Israeli interpretation - which seeks normalization with the Arab world as a prelude to the creation of a Palestinian state alongside Israel - is a far cry from the intent of its drafters, for whom the end of the occupation of lands acquired in 1967 is a precondition for such recognition. It is also completely divorced from the way it is being developed by key actors in the United States, Europe and the Middle East. The Arab League Initiative is a declaratory document. The proclamation, disseminated by the Saudis, adopted in Beirut in 2002 and reaffirmed in Riyadh in 2007, does not, however, contain any operational guidelines. This is exactly what the United States is trying to address. Together with its partners in the Arab world (primarily King Abdullah of Jordan and President Hosni Mubarak of Egypt) it is exploring various ways to flesh out the vision embodied in the initiative, and to break it down into concrete measures to be implemented by all the parties concerned. The most serious work behind the scenes today focuses on these very issues. The Netanyahu government doesn't seem to get it. It is still arguing the relevance of the regional approach and its linkage to the Iranian nuclear threat, instead of doing what has been in Israel's utmost interest since its creation and building on the unusual historical moment today to legitimize its position in the region. If the present government doesn't become an integral part of this effort, with all that this involves, Israel will be totally shunted to the sidelines as events unfold. THIS ADJUSTED orientation is closely related to the second principle of the Obama approach: the internationalization of the Palestinian-Israeli peace process. The political fragility (if not near total domestic incapacity) on both the Israeli and the Palestinian sides, coupled with the increased urgency of the situation in light of developments in Iran, Iraq and Afghanistan, means that progress is contingent on active external involvement. The nature of this intercession (as well as the composition of its US-led consortium) is yet to be specified. But whether this will come in the form of a series of incentives to compel time-bound bilateral negotiations or through the presentation of a well-defined plan which depicts the endgame and prescribes the steps for its realization, it is by now evident that the United States intends to take a lead role. Prime Minister Netanyahu has sought to downplay this change and to minimize its impact. But delays, diversions and bravado are hardly a substitute for a policy which recognizes the new activism, responds to its urgency and capitalizes on it to procure what no Israeli leader has been able to achieve in over 60 years. In real terms, this requires internalizing the third principle of the new American blueprint: the necessity of removing impediments to the realization of a lasting settlement. The collective Obama administration's admonitions regarding the dismantlement of outposts, the freezing of all settlement activity (including that related to natural growth), the removal of checkpoints, the opening of the passages to Gaza and the halting of house demolitions in Jerusalem is unequivocal. Israel must live up to its obligations; its progress in this regard will be closely monitored. There is very little room for maneuvering on these matters. The price of inactivity is bound to be increasingly severe international opprobrium, with the risk of ultimate ostracism. The new leadership in Washington is trying to mold a collaborative world order in which the linchpin is a reconstituted Middle East. It is designing a fresh approach to the region which consists of a unique conceptual worldview, a different discourse and an innovative policy. This new trajectory wraps the two-state solution in an internationally-backed regional envelope which can secure Israel's place for years to come. The creation of a viable Palestinian state alongside Israel is no longer merely a question of words or acceptable language; it is all about a fundamental reorientation and tangible action. It is high time to tune in. The victims of any further anachronistic disconnect between Netanyahu and Obama will not be the US-Israel relationship, but Israel's future in its entirety.