WASHINGTON, DC: Because expectations across the Middle East are so high and the need for change is so great, during the next two months, all eyes will be focused on the early decisions made by President-elect Barack Obama. But precisely because the need is so great, I believe that the region’s leadership should be more than spectators during this critical transition period. This is especially true with regard to efforts to achieve an Israeli-Palestinian peace.

The damage done by eight years of Bush administration neglect and recklessness is all too clear. The Palestinian house is in disarray, with leaderships in the West Bank and Gaza both physically and ideologically divided.

Gaza, under the control of Hamas, is being strangled by an oppressive embargo, with an on-again, off-again truce punctuated by periods of rocket attacks and Israeli assaults. The West Bank itself is being slowly strangled by never-ending settlement growth, hundreds of intrusive and humiliating checkpoints and an oppressive wall/barrier snaking in and out of Palestinian lands.

The paths chosen by the two leaderships, though contradictory, are both flawed. Hamas has made a religion of “resistance” which has won nothing but death and hardship for Palestinians, and insecurity in Israel and reinforcement for hard-line Israeli policies. Meanwhile, the Palestinian Authority’s commitment to negotiations, while commendable, has become pointless, since negotiating without leverage (and without control over the constituency for which they are negotiating) becomes an empty exercise.

On more than one occasion, Barack Obama has stated that he would make Israeli-Palestinian peace a priority, and that he would take a different course than that of his predecessor. But if we are to be honest with ourselves, we must acknowledge that when Obama takes the oath of office on 20 January, he is likely to find a rather unappetizing situation laid out before him in the Middle East.

If nothing changes in the next two months, the Palestinian house will still be divided, and the Israelis will still have no government and no clear mandate (elections, there, will occur on February 10, and all signs point to either hardliner Benjamin Netanyahu’s victory or the cobbling together of a weak centrist-led coalition).

The question, therefore, before the new administration will be: can anything be done and, if so, how to start? Because I believe that steps can be taken, at least by the Arabs to put their house in order, before January 20. The region’s leadership ought to use the next two months’ time wisely.

The first priority must be to achieve Palestinian reconciliation and the establishment of an effective and unified Palestinian government that can command both popular support and the respect of the international community. This will require more than a redux of the Mecca Accords.

The draft proposal being circulated in Cairo provides a useful framework, with its focus on rebuilding a consensus government and an Arab-trained and supported internal security force. Compliance by both Palestinian leaderships is of course essential, but has thus far been elusive. Instead of the current rather hollow threats of sanctions or “naming names”, the Arab leadership ought to create incentives for acceptance.

Clearly what the West Bank and Gaza desperately need are job creation, infrastructure and capacity-building projects, as well as immediate relief. The Arabs do participate in international efforts to subsidize the Palestinian Authority budget, but that merely maintains the unacceptable status quo.

To move the process forward, I would propose the creation of a rather massive multi-billion dollar “Peace and Reconciliation Incentive Fund” that would provide immediate relief and job-creating investment once the parties have agreed to a Cairo-like consensus. The bottom line purpose of the fund would be to support the Palestinian people, and to create the incentive and pressure for their divided leaderships to agree on a new government, which with Arab backing is ready and able to make peace.

In addition, the Arab League, instead of merely reaffirming its 2002 and 2007 peace plan, would do well to enlarge upon it by putting, as it were, “meat on the bones”. It could, for example, spell out in greater detail the types of investment and/or trade incentives that would accompany final peace and/or normalization. And it could even create a staged sequencing (for example, with the signing of an Israeli-Palestinian framework, stage one will occur; with removal of settlements and checkpoints in compliance with agreement, stage two will occur, etc.).

The Arab plan has attracted the interest not only of the incoming US administration, but also many in Israel. Spelling out, therefore, the benefits and vision that accompany final peace would be of enormous benefit.

In addition to the 20 January swearing in of Barack Obama as the 44th president of the United States, there are two other deadlines fast approaching. A Palestinian agreement must be reached by 9 January, the formal date of the end of President Mahmoud Abbas’ term, or the already fragile internal Palestinian situation may become more conflicted. Equally important is the 10 February election in Israel.

Rapid movement towards achieving Palestinian consensus and an enlarged and enhanced version of the Arab Peace Initiative would both remove the dangers presented by the first date and have a positive impact on the latter.

James J. Zogby is founder and president of the Arab American Institute (AAI). This article is distributed by the Common Ground News Service (CGNews) with permission from The Jordan Times.