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President Shimon Peres related that Barack Obama was "very impressed" by the Arab peace plan, when Peres told him about it during their meeting in Jerusalem. Likud chairman Benjamin Netanyahu says Obama was very impressed by Netanyahu's "economic peace" plan.

There's a contradiction here: The Arab League plan that Peres is promoting calls for Israel's withdrawal from all the territories, including East Jerusalem, and for a "just and agreed" solution for the refugees, in exchange for normalization. Netanyahu's proposal calls for the economic development of the West Bank, with Israel continuing to control the territories, and postponing the final-status arrangement until the Palestinians forgo the right of return and recognize Israel as a Jewish state - in other words, until the Messiah comes.

For Peres the division of Jerusalem comes first, economic development last. For Bibi it's economics first and the division of Jerusalem never. He promised that Jerusalem will never even be on the agenda.

So who's right, Netanyahu or Peres? Apparently neither. Obama was here in July, when winning the election seemed very far away and his main goal was not to screw up or ire anyone. Presumably he was polite, and told his hosts their proposals were "very interesting" - they leave satisfied and he hasn't promised a thing.

Now Obama is president-elect and throughout the world the politicians, experts and advisers are trying to win him over. He would need 10 years in the White House to read every position paper submitted to him.

The context of Peres and Netanyahu's respective peace plans is the upcoming Israeli election. If Obama adopts the Arab initiative, it will strengthen Tzipi Livni, who seeks a permanent arrangement and a deep withdrawal from the territories, and say that Netanyahu's positions are on a collision course with America. If he talks up economic peace, that would back Netanyahu's claims that he can get along well with Obama.

The Arab plan is nearly seven years old. Jordan's ambassador to Israel, Ali Ayed, is its biggest booster in Jerusalem. The kingdom printed an official Hebrew version of it, and the ambassador met with at least 50 MKs to push it.

The plan's Israeli supporters believe it could serve as an umbrella for talks with the Palestinians and facilitate an agreement because it is easier for the Israeli public to support concessions and the division of Jerusalem if it means comprehensive peace with the Arab world. But they know it's no substitute for direct negotiations over the core issues.

The attempt to revive the Arab peace plan and to sell it to Obama fits in with the argument over the order of priorities of the incoming administration: First Iran and then the Israeli-Arab conflict, as Netanyahu proposes; "Palestine first" to soften the Arab and Muslim hostility to the United States; or both at once, working on the assumption that dealing with the Palestinians will make it easier for the Arab states to support U.S. measures against Iran, and that dealing with Iran will make it easier for Israel to withdraw from territories in the Golan Heights and the West Bank.

Obama will have to decide whether to take a clear stance before the Israeli elections and attempt to affect their results or to wait until he meets with the next prime minister and coordinates policies.