Barack Obama's Nobel Peace Prize puzzled everyone, even the president himself. Unlike other Nobel prizes, this one represents more anticipation than achievement. His supporters were proud, albeit also baffled, and his enemies predicted - hoped - it would backfire. And it worried many in the Jewish community and in Israel, particularly on the Right, because they fear Obama will try harder to relaunch peace talks with the Palestinians to prove he deserved the prize - which is pretty much how the president and the Nobel committee viewed it. In fact, the announcement came as Obama's special Middle East envoy was in Jerusalem trying to revive talks neither side has shown much enthusiasm for. Shortly before meeting Sen. George Mitchell last week, Foreign Minister Avigdor Lieberman told Israel Radio that a comprehensive peace agreement with the Palestinians is "impossible" for the foreseeable future, and anyone who thinks otherwise - an apparent reference to Obama - "simply does not understand reality." Washington feels it is urgent to resume negotiations, but Lieberman would like to apply the brakes and limit the scope of any peace process while downgrading US-Israel relations along the way. That's part of a sweeping overhaul of Israeli foreign policy that Lieberman is proposing. A draft of the plan was published by The Jerusalem Post last week and confirmed in interviews with sources in Jerusalem familiar with the document. LIEBERMAN THINKS Israel's "lone dependence" on the United States as a strategic ally is "unhealthy" and he'd like to reduce it by expanding ties to "neglected" regions of the world, such as Latin America, Eastern Europe, the Balkans and sub-Saharan Africa, areas he has recently visited. Under his predecessors the agency was "becoming the 'Ministry for Palestinian Affairs,' with Israeli foreign policy almost entirely consumed by this single issue," he complained. The US remains "without a doubt Israel's best friend in the world" but he thinks his changes "will expand and strengthen" Israel's international "circle of support" and be a "relief" for both Washington and Jerusalem. Obama's goal of a comprehensive Israeli-Palestinian settlement is "preordained to fail," in Lieberman's view, and failure will create "disappointment and frustration" that will "damage our relations with the US and Europe and lead to a violent response from the Palestinians." Europe and the US must be convinced that "the most that can be achieved" is a series of incremental steps while avoiding the core issues like Jerusalem, refugees and borders, in his view. He might be able to sell that to many of his admirers, but it is likely to find few buyers elsewhere. The Lieberman plan reflects the parochial view of the foreign minister, who has been sidelined on the most important issues. His only Washington visit produced what has been reported as a disastrous meeting with Secretary of State Hillary Clinton. But it was more of a courtesy call since the US is essentially off limits to Lieberman, which is good since he is held in low regard here. The Washington portfolio is in the hands of Prime Minister Binyamin Netanyahu and Defense Minister Ehud Barak and their top deputies. "The voice of the foreign service is unheard. We've been bypassed," said a top Israeli diplomat. In a transparent, face-saving move Lieberman announced he was recusing himself from handling the peace process because, as a West Bank resident, he had a conflict of interest. His central focus is Russia. He had hoped that since he was born in the former Soviet Union and Russian is his first language, Moscow would embrace him as the go-to guy in Israel. But the Russians knew Netanyahu was the real foreign minister. Moreover, Lieberman's expectation that the Russians would be more forthcoming and cooperative for him proved unfounded. THERE WAS a time when Israel had influential foreign ministers of international stature - Moshe Sharett, Golda Meir, Abba Eban, Yigal Allon, Moshe Dayan, Shimon Peres, Moshe Arens - but lately the job has been a payoff to political hacks like David Levy, Silvan Shalom and Avigdor Lieberman. Lieberman's overhaul play may be moot since he is under investigation for corruption, money laundering, fraud and breach of trust, and could be indicted soon. Haaretz columnist Aluf Benn recently called on Netanyahu to "do Israel a service and fire Lieberman. The damage that Lieberman is causing the country and its relations with foreign countries is getting worse." French President Nicolas Sarkozy reportedly offered similar advice to Netanyahu during a private meeting in Paris several months ago. The Lieberman plan is "an outcome of the fact that the minister is out of business in the US relationship. This is the reality Lieberman has to deal with, so what's left for him is to come up with something that marginalizes the US relationship from his perspective," said an Israeli expert on US relations. "He's had his say, and we'll move on. In other words, it's safe to ignore Yvet [Lieberman's nickname]. That's what Bibi does."