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On October 23, 1998, Prime Minister Benjamin Netanyahu signed the Wye River Memorandum, thus bringing about the end of his first government. He did this with his own mouth: After being perceived as undermining the Oslo Accords, and after declared that any withdrawal from more than nine percent of the West Bank would harm Israel's security, he ratified the acccords and sought a 13-percent withdrawal. His term was rife with conflicts with the United States president, and he made both the right and left heartily sick of him. A decade later, Netanyahu is at a similar juncture.

To lead or to be dragged - that is the question. As prime ministers, Menachem Begin, Yitzhak Rabin, Shimon Peres (now president), Ehud Barak (now defense minister) and Ariel Sharon chose to shape the diplomatic process, and influenced U.S. policy. Yitzhak Shamir and Netanyahu were dragged to Madrid and Wye after endless quarrels with the U.S.

The administration of President Barack Obama has already set its course: the establishment of a Palestinian unity government as the basis for negotiations on a comprehensive final-status agreement, in accordance with the Oslo-Annapolis approach, leading to a Palestinian state.

Under current circumstances, this is a clear recipe for failure. Their constitutional and political crisis renders the Palestinians incapable of ratifying any agreement.

An attempt to compel them to do so could put the Palestinian Authority to a fatal test. The fundamental weakness of this approach is its all-or-nothing dynamic: An agreement on Jerusalem is a condition for an economic agreement.

Therefore, a strategy of achieving progress in negotiations while avoiding an agreement might well be more relevant at this time. But this conflicts with Obama's approach. To persuade him to accept it, Netanyahu will have to present a reasoned and comprehensive argument that speaks to American values and interests. He will have to clearly accept the two-state principle and commit himself to the civic, economic and security development of the Palestinian Authority until conditions are ripe for its transformation into a state on the basis of Israeli and American recognition.

Netanyahu could propose that the future of Israeli-Palestinian relations be confined to discussion between Israel and the U.S., and not with the Palestinians, and that the permanent status be formulated above all on the basis of agreements between Israel and the Palestinian state. To realize this vision, Netanyahu could pledge not to obstruct constitutional reform in the West Bank that would lead to free elections for a new parliament and government in the West Bank and East Jerusalem.

Obama sees the Palestinian issue as Netanyahu's test. Ostensibly, there is a paradox: Why deal with dismantling outposts and freezing settlements when Iran is close to obtaining nuclear capability, Hezbollah is on the verge of taking over Lebanon and there might be a breakthrough on the Syrian track that will change the face of the Middle East?

The reason is simple: Republicans and Democrats - former president George W. Bush and Obama, former secretary of state Condoleezza Rice and her successor Hillary Clinton - know that in this arena successive Israeli governments have pulled the wool over their eyes. So they have little patience.

If Netanyahu proposes a vision and path, the U.S. will turn a blind eye to the development of the settlement blocs and refrain from public confrontation with Israel on those issues. Otherwise, the Netanyahu government is liable to find itself discussing the settlements at every meeting with the American leadership.

Ten days from now Netanyahu will take part in one of the most important meetings of his life. The whole world and many Israelis are expecting a clash, yet the positions of the U.S. and Israel might turn out to be closer than expected. The ball is in his court.

The writer is the founder and president of the Reut Institute policy research group.