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When the history of the second - and hopefully, final - Benjamin Netanyahu term is written, the narrative will pivot around the huge missed opportunity of 2010, around the story of how he allowed the chance to move ahead on security and peace issues to slip through his hands. This was a moment (a year ) that passed by, never to return. The objective moved farther from reach, and the terms of any deal have worsened.

Netanyahu's two wishes are to bomb Iran, and to be dragged toward an agreement with the Palestinians. To fulfill both wishes, he needs broad consent from the American government. With regard to the Iranian matter, even before Washington could get involved, Netanyahu was blocked last year by the "gang of four" - President Shimon Peres, IDF Chief of Staff Gabi Ashkenazi, Mossad head Meir Dagan and Shin Bet director Yuval Diskin. This was a rare fusion of strong-willed people; it was joined by Brig. Gen. Hasson Hasson, an experienced intelligence expert and aide-de-camp to Shimon Peres.

The suspicions harbored by professionals in the security establishment toward Netanyahu would lessen, were he to have the backing of President Barack Obama. To win this backing, Netanyahu agreed, grudgingly, to a temporary freeze on settlement building. But he then chose not to take the next necessary step, and he wasted months of the freeze and ended up without any diplomatic dividends.

Meantime, in Washington, the first half of Obama's term was wasted. During the second half of his term, he is vulnerable, and finds himself in wearying battles with the Republicans. Obama has beaten a retreat from his belief in sweeping diplomatic gains, and now measures his steps according to reelection calculations: Heading toward 2012, his policy will be marked by military pullbacks and budget cuts.

Vainly, the President has hoped to forge a compromise with the Republicans, headed by Netanyahu's ideological soul mate, House Speaker John Boehner. In 2010, Ehud Barak deluded himself into believing that Israeli flexibility vis-a-vis the Palestinians would induce Obama's acceptance of a large addition to the security budget - to the order of $20 billion for the decade. What is $20 billion between ourselves and the Americans, Barak said, magnanimously, to Hillary Clinton and her colleagues in the US government, compared to the $1 trillion you threw toward the morass of Iraq and Afghanistan during the past decade?

According to Israel's logic, the acceleration in the American pullout from Iraq and Afghanistan leaves money, willingness and inclination in favor of an operation against Iran's nuclear program, and also in favor of disbursements to Israel. The Americans' logic, however, is the exact opposite: You don't divorce yourself from two bottomless pits in order to jump into a third one (or a fourth one, counting Libya, a barrel in which America just dipped its toes ). Every dollar, or each billion dollars, in Barak's prodigal account is now up for discussion in a major contest between the Democrats - headed by the White House, and including the Senate majority - and the Republicans and the House majority. In the Democrats' rhetoric, Obama stands for the people, whereas the Republicans represent the millionaires.

Obama chose this moment to change the guard at the Pentagon: In two days, Robert Gates leaves his defense secretary post, and Leon Panetta (from the CIA ) replaces him. The main policy line has not altered. Gates and Panetta belong to the political mainstream; Gates is a little to the right of center, Panetta is a bit to the left of him. Both belonged to the 2006 Iraq "study group," which, led by James Baker and Lee Hamilton, pressured President George W. Bush to change course on Iraq, and engage contacts with Iran and Syria.

That remains Panetta's approach, and it includes openness to talks with the Taliban in Afghanistan - should the Taliban meet criteria akin to those enforced by the Quartet regarding Hamas. The Republican Gates served Obama faithfully for two and a half years. He will not attack Obama during the elections, but neither wil he defend him. Panetta, a former Democratic Congressman, and Chief of Staff in the Clinton White House, will conduct affairs at the Pentagon in accord with Obama's interests.

Under these circumstances Netanyahu - who is in thrall to the extreme right outside the Likud party (Avigdor Lieberman ) and within Likud - is no more than a nuisance. Should he, as a result of the Palestinian initiative this September, become mired in a political debacle and a military confrontation, that's his problem. And if Israelis are forced to pay the price of Netanyahu's and Barak's errors, that's their problem. Nobody forced the Israeli public to become reconciled with this government alignment and with its mistakes.