The renewed violence between Israel and Hamas, in which 1.5 million innocent Palestinians are caught, is yet another demonstration that there is no military solution to the Israeli-Palestinian conflict. Israel will not be able to secure its future, normalize its relations with the region and live in peace without an agreement with the Palestinians. Palestinians will not achieve liberation and independence without an agreement with Israel.

The conundrum is that Palestinians and Israelis cannot on their own completely bridge the gaps separating them. To reach an agreement they need outside intervention, which can only come from the United States.

Beyond the violence, there is a critical problem that renders the status quo unmanageable: the expansion of Israeli settlements in the West Bank and Jerusalem, which erodes the physical possibility of a two-state solution. Settlement expansion threatens the meaningfulness of future negotiations about the establishment of a Palestinian state and poisons the political atmosphere. It creates political problems in Israel by empowering a passionate and belligerent constituency opposed to territorial compromise. The leadership of the Palestinian Authority, and that in the Arab world, is largely defenseless against the accusation that they have failed to deliver as long as settlements grow.

Along with securing a lasting cease-fire in Gaza, freezing the settlements will be the main issue the incoming Obama administration must deal with in its early days. There is an urgent need to buy time to prepare the political groundwork for a successful round of negotiations, bolster moderates on both sides, establish an effective framework, and perform the other necessary tasks that would have to precede an agreement, without continuing to lose ground and credibility.

The reality is that no Israeli government has been able to enact a comprehensive settlement freeze, even during the Oslo period, nor is one likely to soon do so on its own and survive. Israeli leaders need help, even though peace is in Israel's interest. Only the American president can give the vital and necessary political cover to an Israeli prime minister and Cabinet for this step to be adopted. This cannot take the form of pressure, but should instead reflect strategic understandings and interests.

Along with the US, the Arab states have an important role to play. While expanding the dialogue and even negotiations at the appropriate level with all parties, Washington needs to work on a strategic partnership with responsible Arab leaders committed to ending the conflict. Israel's freeze of settlement activity needs to be coupled with significant incentives provided by the Arab world. These could take the form of public movement toward operationalizing the Arab Peace Initiative that could serve as a reasonable quid pro quo for Israel's settlement freeze.

Many political issues in the Middle East are interconnected. A comprehensive regional strategy is needed in which the Palestinian-Israeli conflict is prioritized. Even though resolving the conflict will not solve all other regional problems, it would be uniquely helpful across the board. Acknowledging that no other achievable goal in the Middle East would bring as many benefits to the US, we must abandon any thoughts about managing the conflict and proceed with a serious strategy to resolve it.

Palestine is the ultimate political symbol in the Arab and Muslim worlds. Whoever is perceived as the authentic champion of that cause gains enormous, possibly unassailable, credibility. Ceding the Palestinian issue to religious extremists would likely pave the way for an unstoppable wave of revolts, even revolutions. The forces aligned with Iran could not wish for a more powerful weapon in their campaign to destabilize the Arab regimes and the Arab state system.

The United States, Israel and the Arabs have much to fear from such a scenario, and all need to move quickly to defuse this ticking bomb. The strategic partnership must move public perceptions from a zero-sum game to a win-win scenario through a conflict-ending agreement.

Equally, and urgently, closer attention needs to be paid to damage inflicted on moderate and realistic policies, and their advocates, by a toxic public discourse being peddled in the Arabic-language media that puts pragmatism and realism on the defensive. It should be clearly grasped that the appeal of the radical religious forces is the sense of injured dignity that Palestinians, Arabs and Muslims intensely feel. Military defeats, daily humiliation, and gruesome images and accounts of suffering under the occupation enhance rather than weaken their appeal.

Improvement of the quality of life for Palestinians requires the further development of the Palestinian security system based on a nation-building doctrine rather than on one perceived as enforcing the Israeli occupation; based also on improving access and mobility; and based on economic improvements and institutional development, including good governance. The Bush administration has launched initiatives on some of these fronts since the Annapolis conference; they have begun to bear fruit and need to be expanded.

Criticism notwithstanding, Annapolis has yielded several positive trends that must continue: It reaffirmed the global commitment to a two-state solution. It launched several channels of formal and serious negotiations between the Palestinians and Israelis, dealing with all outstanding issues. It was followed by the indispensible, and the unquestionably successful, rebuilding of the Palestinian security system. It placed a premium on Palestinian economic development, even if it came up short on delivering sustainable vehicles for development. And it identified good governance as a major objective, though the instruments designed to achieve this goal have fallen far short and need to be reassessed.

The twin policy of isolating Hamas and empowering moderates has meant very little to the Palestinian people. While the quality of life plummeted in Gaza under Hamas, the anticipated improvement in the quality of life for the Palestinians of the West Bank and Arab Jerusalem has simply failed to materialize. Failure to rectify that now would be political malpractice.

The two-state solution, as Winston Churchill once said about democracy, is the worst solution except for all the others. And, to make matters worse, it has an expiry date. The future of Palestinians and Israelis, even their survival, is at stake. The current crisis in the Middle East offers the opportunity to resolve the Palestinian-Israel conflict and to transform the political landscape, not just in the Middle East, but across the world.