The Middle East is gripped by a Muslim cold war, fiercer than anything since the 1950s. This deep political divide could stymie US President Barack Obama's well-intentioned efforts toward creation of a Palestinian state, engagement of the Iranian and Syrian regimes and quick withdrawal from Iraq. Relations among the Muslim states of the Middle East have never been worse, not since the days when Egyptian president Gamal Abdel Nasser sent his agents to assassinate political figures in Jordan and conduct a war in Yemen against the Saudi-backed royalists. A razor-sharp cold war separates the moderate Arab Sunni states, including Egypt, Saudi Arabia, Jordan and most of the Gulf states, from an Iranian-led axis that includes Syria, Hizbullah, Hamas and, less importantly, Qatar. The issues over which these two camps struggle are as clear as the divide between them. Meeting the Iranian threat is the most important of them. For the Gulf states, Iran's success might threaten their survival. For Egypt, Iranian ascendancy would end its perennial claim to regional preeminence. Moreover, Iranian nuclear capabilities would saddle the Egyptian state with the colossal costs of embarking on a nuclear weapons program at a time it desperately needs to continue allocating resources for social development. This ordering of priorities was the main reason Egypt opted out of its confrontation with Israel and signed a peace treaty with the Jewish state 30 years ago. IRAN'S SUPPORT for Hamas in Gaza ranks probably second on the list of concerns for the moderate Arab Sunni states. Hamastan is anathema to this camp, for it sets a number of bad precedents. Gaza is the first area in the Arab world to be ruled by an organization that rose from the ground up, a fundamentalist movement that can claim a certain democratic legitimacy. Hamas is creating a revolutionary theocracy in the area under its control. It is the "deepest" Iranian bridgehead in the Arab world. Moderate Arab states also oppose another Iranian bridgehead in Lebanon. Just as among the Palestinians these states clearly support Mahmoud Abbas, so they just as clearly support the Siniora government - a coalition of Christians and Sunnis under Saad Hariri (whose father was probably assassinated by the opposing axis) - against Hizbullah and its Iranian and Syrian allies. Thus, in both the Palestinian and Lebanese arenas, deadly local enmity is fed by the larger Muslim states' cold war. Less well-known but palpable nevertheless is the contest between the two camps over Iraq's future. The moderate Sunni states are worried about a Shi'ite-led Iraq that would play a major role in cementing the Iranian-led Shi'ite-heterodox arc from the Iranian border to a Hizbullah-controlled Lebanon. Saudi Arabian support for Sunni parties in Iraq is well known, but Saudi Arabia probably supports armed Iraqi Sunni groups as well. Obama will be most surprised to discover that objection to any substantial movement on a Palestinian state will come less from Israel, and more from Egypt, Saudi Arabia and Jordan - which fear that under the present circumstances Hamas would probably take over Judea and Samaria via an expanded Palestinian state. As far as they are concerned, Israel did not batter Hamas sufficiently to allay their suspicions. These states prefer "process" over meaningful movement regarding the Palestinian problem. Nor will these Arab countries be pleased about the newfound American desire to engage Iran and Syria. Saudi Arabia remains committed to seeing Bashar Assad tried in an international court, not letting him off the hook by engaging him. All the moderate Arab states would like to see a US that wields a big enough stick at Iran - short of war - to compel it to desist from its nuclear program. Needless to say, a rapid US military withdrawal from Iraq is hardly the way to wield the big stick at Iran. President George W. Bush also angered moderate Arab countries, but for a different reason. With Bush, moderate Arab states felt threatened by his focus on democratization. Obama, however, now threatens them with a policy of engaging the Muslim enemy. Thus, the mainstream Arab countries, like Israel, seek US resolve in confronting the Iranian-led axis, not an "outstretched American hand" to the radical part of the Muslim world. An America that "engages" this radical axis could turn the Muslim cold war into something far more ominous. The writer is a senior research associate and Arab affairs specialist at the Begin-Sadat Center for Strategic Studies at Bar-Ilan University.