We Israelis have to add a new term in our diplomatic lexicon and to overcome our national inability to say “Thank you” to friends who work for our good.Take the Obama administration, which in five years has strengthened security cooperation with us more than any previous administration, given us massive economic aid, is in the process of dismantling the Syrian chemical arsenal, has succeeded in orchestrating crippling international sanctions on Iran’s economy to bring it to negotiate the prevention of nuclear arms development, has waged war against Islamic terror in Iraq and Afghanistan and is actively engaged in bringing about historic conflict resolution with the Palestinians and with the Arab world, our security interests very much in mind. Secretary of State John Kerry expends unprecedented energy, determination and creativity; his current effort is our best chance to preserve our identity as a Jewish democracy living in security.And what is the reaction of our prime minister? Suspicion, criticism and working against the administration with congressional Republicans.The writer is honorary president of the Peres Center for Peace and served as Israel’s chief negotiator for the Oslo Accords.Barbara Hurwitz edited this column.America is not doing us a favor, it is working for its own strategic interests, but from a most supportive point of view. It is in our strategic interest to work with the United States, not against it.This is crunch time. The America’s diplomatic offensive results from an in-depth analysis of its security interests in the Middle East.Without conflict resolution at the core of the region, there is a real danger that the extremist, fundamentalist forces will have a field day and will ignite violence and terror on the shoulders of a disillusioned, frustrated Palestinian and Arab public opinion.In addition to understanding who our friends are and what our interests are, we must think, decide and act accordingly. And the time is now. It is quite basic. Seven million Jews and 4.5 million Arabs live between the river and the sea. Almost 300 million Arabs live around us.The choice is between two states, with Israel normalizing its relations with the Arab world, and no nation-state at all, with regional conflict. The trade-off is clear – we must grant the Palestinians the real ability to create a fully independent state on the territories occupied in 1967 in return for full peace, security and real normalization with the Arab world.Permanent status must be coupled with regional peace and regional structures for political, economic and security relations in three regional structures with international support.The Israeli-Palestinian circle – The conflict resolution must address the fundamental interests of both sides and not political positions and predicaments. Israel needs security in a volatile and mostly hostile region, economic development as well as regional and international legitimacy. The Palestinians need full independence, a modern nation-building process as well as regional and international support. Both sides want to safeguard their unique identity as nationstates.These interests can be reconciled. A viable Palestinian state must be based on the 1967 lines with mutually agreed land swaps. Israel’s security will be safeguarded by a better and more equal relationship with Palestine that must be demilitarized (including Gaza) with international inspections and security arrangements along the borders for several years to prevent the anti-peace forces from sabotaging the agreement. The settlement blocs close to the Green Line include 75 percent of all settlers (4 percent of the West Bank) and the other settlers will be relocated into the blocs. An issue important to the Palestinians is a full release of all prisoners with the peace agreement. In this way, independence and security can be reconciled.One must also reconcile the two identities and narratives. There should be mutual recognition of the two nation-states. Israel must recognize Palestine as the national homeland of the Palestinian people and deal with it on the basis of full equality. Palestinian self-determination is a basic right, but also an Israeli interest for the preservation of our national and democratic identity.Israeli self-determination as the one homeland of Jewish people is a basic right (both rights were recognized by the UN in 1947), but also a Palestinian interest. Without a Jewish state to its west, Palestine would not be Palestinian, but a binational state.This mutual recognition would be a recognition of reality, which not only the leaders, but also the two constituencies, must get used to. As part of the reconciliation of identities, Jerusalem must be a shared capital, with the holy sites shared according to their religious character. It can remain a united city with the two sides cooperating on its socioeconomic development.On the issue of refugees, the problem must be solved, as mentioned in the Arab Peace Initiative, in a just and agreed upon way, while not altering the demographic integrity of both countries. In other words, the “right of return” would be to the new Palestinian state, not to Israel, accompanied by an international compensation mechanism.These solutions would reconcile the basic interests and identities of both sides in a fair and sustainable way and would put an end to the conflict and to mutual claims. They demand major decisions of historic magnitude.Both leaderships at this point are too weak to take such decisions on their own.The Palestinians are in need of a regional umbrella to make historic concessions, as well as of international support. Israel is in need of a regional quid pro quo for its concessions as well as international support, hence the other two circles of peacemaking: The Israeli-Palestinian-Jordanian circle – an economic federation. A two-state solution must take into consideration the interests and role of neighboring Jordan.Palestine and Jordan are linked demographically and geographically. Israel and Jordan are linked by a peace treaty.A Jordanian role, together with the Palestinians, and not in their place, would make the decision-making process easier and the outcome more stable. Jordan has governance and security experience and is respected in the West. The economic future of the three countries is intertwined, as every economy today is of a regional nature.A trilateral cooperation effort should be embarked upon, together with the negotiation process, leading to an Israeli-Palestinian- Jordanian economic federation, like Benelux, following the permanent-status agreement. It should be based on free trade, on cooperation regarding water, energy and transportation infrastructure, as well as on joint ventures, especially in tourism and in the development of the Dead Sea area.This cooperation can also be useful on the security front, by establishing a trilateral force along the Jordan River for the prevention of terror (possibly under American command).According to the Israeli-Jordanian Peace Treaty and the agreement between King Abdullah and President Mahmoud Abbas in March 2013, Jordan has a role with regard to the Muslim holy sites of the Old City of Jerusalem.This can be helpful in resolving the most emotionally loaded issue.A Jordanian role in the peace process would facilitate and encourage Palestinian and Israeli decision-making. Yasser Arafat had Hosni Mubarak as a partner to agreements and concessions, Abbas may have King Abdullah in a similar role. As for Israel, Jordan is viewed as experienced on security, with a positive attitude toward Israel, and its inclusion would make agreements and concessions more acceptable.The regional circle is of prime importance.The Arab world’s motive for conflict with Israel was the unresolved Palestinian question. With permanent status, all member states of the Arab League have obliged themselves in the Arab Peace Initiative of 2002 to normalize relations with Israel, which means the establishment of diplomatic relations between us and about 20 Arab countries. Today no country in the world recognizes Jerusalem as our capital, not even the United States; after permanent status, all of the international community and the Arab world will recognize West Jerusalem as Israel’s capital and establish their embassies there.Peace and security in today’s world is of a regional nature, with regional political, economic and security cooperation and structures.In this realm, the Arab League should endorse the permanent-status agreement as well as the future Israeli-Palestinian-Jordanian economic federation.Peace must profoundly change the regional economy, from destruction and poverty to cooperation and growth. Such cooperation could be in the fields of shared infrastructure, such as water, energy, transportation, communications, etc. Tourism is the leading peace industry and with peace and cooperation the number of tourists to the region, including to Israel, could easily triple or more.Such cooperation can sustain peace and the multilateral planning of it can give important incentives to Israel and Palestine.For us, it creates a new horizon of regional and international relations, for the Palestinians it creates an important umbrella for their decision-making and nation-building processes.These transformations will be slow and difficult, but as they were possible in most post-conflict regions, they must be an aim of the Middle East peace process. They speak more than the political process to the economic well-being of the people.These three circles of peace efforts must be encouraged and supported by the international community, especially the US and the EU. The United States is the leading player in the peace process and has turned from facilitator to effective mediator.Beyond its necessary bridging proposals, Washington can contribute to the peace process by working closely with the parties on security. The US has the intelligence capacity that will make the fight against terror more effective after the IDF withdrawal from the West Bank. It also has the political clout to influence the security situation, as no country is eager to lose its support.Barack Obama and Kerry plan to get the American private sector involved, especially for the economic development of the new Palestinian state. Regional projects may become of interest to US companies, including in the Israeli-Palestinian-Jordanian triangle.In the past, American companies showed interest in developing the “Lowest Point on Earth Park” at the Dead Sea as a major global tourist attraction.The European Union has signaled that it intends to upgrade Israel and Palestine to the highest non-EU member status, with major advantages for both economies. It can work with the region on regional economic development as the force and voice of experience.Sustainable peace needs a peace architecture.It is legitimate in a democracy to oppose peace and there are plenty who do in the Arab world and in Israel. On the other hand, it is defeatist for those who want peace to say it is not possible. Peace is difficult to achieve, as it demands compromising with former enemies, yet with creativity and courage, it is not only possible, but a must.