After 100 years of conflict, Arabs and Jews have seen peace envoys come and go; peace plans rise and fall. While these efforts have not always been driven by altruism, certainly America's are rooted in good intentions. Obama administration peace envoy George Mitchell is now trying to coax the comparatively moderate Mahmoud Abbas back to the negotiating table by offering customized "terms of reference" memos (TOR) for a way forward to him and Binyamin Netanyahu. According to Arab press reports, Abbas wants to see the Saudi-inspired Arab Peace Initiative, the Oslo Accords, Road Map and Annapolis all cited in his TOR. And he wants negotiations to pick-up from Ehud Olmert's last offer - the one Abbas never bothered responding to. Plainly, the TORs presented to the respective sides need to be harmonious, otherwise only an illusion of momentum is achieved, though some peace-processors argue that even mere talking is a desirable interim goal to calm a volatile atmosphere. US Secretary of State Hillary Clinton essentially provided Israel with the TOR it needed back on November 25 when she stated: "We believe that through good-faith negotiations the parties can mutually agree on an outcome which ends the conflict and reconciles the Palestinian goal of an independent and viable state based on the 1967 lines, with agreed swaps, and the Israeli goal of a Jewish state with secure and recognized borders that reflect subsequent developments and meet Israeli security requirements." Thus the administration, after a year of driving down the wrong road, is now back to where the Bush II White House had constructively left matters - meaning that there can be no return to the 1949 Armistice Lines, and that agreement hinges on land swaps, on Israel's retention of strategic settlement blocs and on the Palestinians accepting the legitimacy of Israel as a Jewish state. Talks can resume as soon as Abbas drops his prerequisite demand for a total settlement freeze everywhere over the Green Line. AN ADMINISTRATION that wants a breakthrough peace agreement in 2010 might also want to rethink its own terms of reference. Here are some suggestions: â€¢ The less the US says about construction in Jewish neighborhoods of Jerusalem the better. Palestinians know that Israel is not going to tear down Neveh Ya'akov, Pisgat Ze'ev, East Talpiot or Har Homa. They argue, however, that the bigger these neighborhoods get, the less space the Arabs will have after a peace deal. All the more reason, Mitchell should be telling Abbas, to hasten back to the bargaining table and stop behaving as if he had all the time in the world. That said, we think it is unhelpful for Israel to create pocket Jewish neighborhoods with negligible security utility in built-up Arab sections of the capital. Not every Jewish right needs to be exercised. â€¢ The administration has modified its initial fixation on settlement construction. Once the two sides agree on permanent boundaries, settlements on the "wrong" side of the border will be dismantled. Meantime, Israel has taken the extraordinary step of ordering a moratorium on new construction encompassing even the strategic settlement blocs. The administration now needs to take on board that the settlement issue is a red-herring. â€¢ Israelis do not want to see Iranian or al-Qaida camps popping up in the West Bank within walking distance of our major population centers. The sooner the administration incorporates the concept of a demilitarized "Palestine" into its peacemaking, the faster progress can be made. A workable mechanism for Israeli and international oversight of crossing points between the West Bank and Jordan is equally essential. â€¢ There can be no "right" of Palestinians refugees and their descendants to "return" to Israel proper. Palestinian demands for abandoned property reparations will be countered by the parallel demands by Jewish refugees and their descendants of Arab countries. The administration must tell Abbas to start preparing his people for this reality. ONE FINAL suggested term of reference: The administration's Iran policy is the peacemaking lynchpin. The quicker the mullahs are defanged, and Hamas and Hizbullah deflated, the sooner moderate Arab elements may be willing to take chances for peace. We applaud the president for speaking out personally Monday in support of the Iranian people protesting against the Khomeinist regime. The more he leans on Iran, the closer the region gets to peace.