US Middle East envoy George Mitchell, on his first visit here since the new government took office, is scheduled to meet separately today with Prime Minister Binyamin Netanyahu, Defense Minister Ehud Barak and Foreign Minister Avigdor Lieberman to discuss how to move forward on negotiations with the Palestinians. He may well find the Israeli leadership distracted. In a report neither confirmed nor categorically denied by the White House, The New York Times has stated that Barack Obama may be ready to drop a previous Bush administration demand that Iran stop enriching uranium as a precondition for holding direct negotiations with Washington. The US has anyway said it is ready to join talks with Iran that Britain, China, France, Germany and Russia want to convene. Simply put, Teheran's intransigence has yet again paid dividends. The US would be willing to "allow Iran to continue enriching uranium for some period during the talks," according to the Times. America's immediate aim is for Teheran to allow international inspectors into its nuclear facilities wherever they may be. Washington's longer-term goal is for Iran to cease enrichment. Clearly, even at this late date, a compromise could be found that would allow Teheran to maintain a closely monitored civilian nuclear program in return for acquiescing to intrusive international inspections to guarantee it has ceased pursuing a bomb. Israelis worry, however, that the administration will delude itself into thinking that it has lots of time for talk. We've seen how adept Iran is at playing for time. So, any diplomatic approach needs to have fixed dates and performance-based milestones. There is reason to think US decision-makers appreciate how fast the clock is ticking. Admiral Mike Mullen, the chairman of the Joint Chiefs of Staff, told a House committee last month that Iran had enough material to manufacture a bomb. He added: "Iran having a nuclear weaponâ€¦ is a very, very bad outcome for the region and for the world." Dennis Blair, the director of national intelligence, told a Senate committee that, "although we do not know whether Iran currently intends to develop nuclear weapons, we assess Teheran at a minimum is keeping open the option to develop them." CIA director Leon E. Panetta was more explicit: "From all the information I've seen, I think there is no question that they are seeking [weapons] capability." Even the International Atomic Energy Agency says Iran's 5,500 centrifuges provide it with enough enrichment capacity to build two nuclear bombs a year. In other words, with the Bush administration bogged down in Iraq, the EU shamelessly stoking Iran's economy, Russia and China flagrantly running interference for it at the UN, and Iran's apologists in the media presenting Israel as the real villain in the Middle East, the mullahs were able to cross the threshold - they now have the material and the knowledge, but have not yet constructed a bomb. WITH THE threat of an Iranian nuclear device hanging over us, emboldening this region's extremists and cowing its moderates, it is improbable that Mitchell will make much headway on the Palestinian track. Furthermore, the Palestinian polity is paralyzed by divisions between an ascendant Hamas and a fading Fatah. Yet in rejecting an unprecedentedly magnanimous peace plan proffered by the Kadima government late last year, Mahmoud Abbas's "moderates" exposed themselves as unwilling to make the most rudimentary compromises necessary to achieve a two-state solution. To restate the obvious: No Israeli government will agree to withdraw to the 1949 Armistice Lines, or to a militarized "Palestine" or to a Palestinian "right of return." Moreover, Fatah's recent affirmation of its disgraceful refusal - 16 years after Oslo - to recognize the legitimacy of Israel as a Jewish state speaks volumes about ultimate Palestinian intentions. And while we welcome Abbas's cordial pre-Pessah telephone call to Netanyahu, what Israelis would really like to happen is for Fatah to become a genuine alternative to Hamas. That means preparing its people for the kinds of painful concessions they will have to make - alongside the painful concessions Israelis have already indicated a willingness to make - for peace. So the sooner Iran's toxic sway over the region is dissipated, the better the prospects that Mitchell can help us all move toward reconciliation.