It's no secret that at the Prime Minister's Residence in Jerusalem they weren't opening bottles of champagne to celebrate the extension of U.S. President Barack Obama's rental agreement for four more years. Should Prime Minister Benjamin Netanyahu succeed in getting his contract extended as well, he probably has several reasons to fear that his next stint at Obama's side will make him nostalgic for the first one.

Obama now has four years to settle accounts with Netanyahu, for his open support of Mitt Romney, for degrading him before Congress, for freezing negotiations with the Palestinians, for the settlements, and for his attempts to teach him leadership lessons on the Iranian issue. Now Obama will be able to deal with Netanyahu freely, without having to fear the Jewish lobby or the money of Sheldon Adelson, who was seeking the president's political head.

During a U.S. president's second term, he can take more chances than during his first. But the question is whether Obama will want to spend the next few years trying to justify the Nobel Peace Prize he received at the start of his tenure, and risk making a sad joke of himself, or prefer to focus his time on repairing the limping American economy? Will Obama's aides advise him to start settling his account in the coming days, or will they warn the president that doing so risks having Netanyahu recruit him for the right's election propaganda, as yet more proof that the whole world is against us?

If, during his first term, Obama was able to blame America's troubles on the wars in Iraq and Afghanistan that he inherited from his predecessor, George W.Bush, during the next four years he'll have no one to blame for anything but himself. This time he won't enjoy 100 days of grace, or even 10.

The request by the Palestinian Authority to upgrade its representation at the United Nations to that of a non-member state (like the Vatican) is being made. PA President Mahmoud Abbas agreed to spare candidate Obama the need to choose between supporting the Palestinians and eroding his support among Jewish donors, and taking Israel's side at the price of American isolation in the UN General Assembly. But assuming Abbas doesn't get cold feet, Obama will now be forced to choose between him and Netanyahu.

PA or not to PA?

Every choice has a price, of course. Scuttling the Palestinian initiative in the Security Council, where the United States has veto power, will portray Abbas as an empty shell, and there are hints that this would lead to his resignation and to the collapse of the PA, chaos in the territories, a third intifada, a serious crisis in relations with Jordan and Egypt and a regional tempest.

On the other hand, supporting the Palestinian initiative, or even abstaining, will likely lead to sanctions against the Palestinians by the Netanyahu government, which will also lead to Abbas' resignation, the collapse of the PA, chaos, intifada, and a regional crisis. All this while Syria (and perhaps Lebanon) are turning into a mixture of Somalia and Afghanistan, while Iraq is being portrayed as Iran's backyard. If there's anyone in the world who can offer a third option that would prevent these horrifying scenarios, it's Barack Obama.

The American voter can no longer remind him of the dramatic commitment he made in June 2009, in his Cairo speech, with regard to the two-state solution: "I intend to personally pursue this outcome with all the patience that the task requires."

But in the coming days it may turn out that the alternative to pursuing this outcome is not prolonging the diplomatic stalemate and maintaining the relative calm. Supporting Netanyahu, i.e., opposing the Palestinian initiative in the United Nations, would not just be a slap in his own face, after in Cairo he had promised that "America will not turn our backs on the legitimate Palestinian aspiration for dignity, opportunity and a state of their own." If the president who declared then that "the only resolution for the aspiration of both sides is to be met through two states, where Israelis and Palestinians each live in peace and security," tries to abandon the Middle East, the Middle East will pursue him.

The 2012 model Obama is different from the 2009 model, and Cairo, like the entire Arab world, is totally different from what it was at the start of his presidential tenure. The new Middle East reality poses new challenges for the United States, and different rules.

A diplomatic-security position paper prepared over several months by a team of experts headed by Thomas Pickering, a former undersecretary of state in the Clinton administration and a former ambassador to Russia, the United Nations and Israel, suggests that the president discard the old formula that "the United States can't want peace more than the parties themselves."

The document, written by Geoffrey Aronson, director of research and publications at the Foundation for Middle East Peace, and Philip Dermer, a former senior officer in the U.S. military, stresses that getting actively involved in resolving the conflict is a supreme U.S. interest. The experts, among them several senior U.S. Army officers, suggest that the next administration present a comprehensive plan to recognize Palestinian sovereignty on the basis of the Arab Peace Initiative, as well as a security outline based on deploying an international-Arab monitoring and inspection force in the areas of Palestine.

The team proposes that the U.S. president present Israel with the plan for Palestinian sovereignty as part of a plan to assure Israel's security. The security component includes preserving Israel's qualitative military advantage. And in return for Netanyahu giving up his vision of the "[almost] whole Land of Israel," Obama will ignore Israel's absence from the Helsinki Conference on a Nuclear-Free Middle East, which was the president's idea in the first place, and will keep his promise to keep Iran from becoming a member of the nuclear club.

It should be noted that at Abbas' Mukata headquarters in Ramallah, they weren't drinking any toasts, either. Ever since Obama vetoed a Security Council resolution condemning the settlements, the Palestinians have stopped pinning their hopes on him. Moreover, several European leaders had told them that if Mitt Romney had been elected president, it would have been easier for them to vote for their status upgrade, since they didn't owe the Republican challenger anything. Now that support might be harder for the Palestinians to obtain.