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Barack Obama's speech upon receiving the Nobel Peace Prize should be called "the realist manifesto." The U.S. president summed up his political worldview in seven words: "I face the world as it is." Not a messiah, not a prophet and not a dreamer. Rather, a leader who recognizes the limits of human nature and sees statecraft as a power game. A leader who envisions the highest ideals but understands that they cannot be attained through willpower and persuasion alone. A leader who believes in evolution and does not receive divine inspiration for his political moves like his predecessor George W. Bush.

When Obama was elected, his followers described him as a cross between the prophet Isaiah, Mother Teresa and Uri Avnery - a harbinger of the End of Days, a helper of the unfortunate and the downtrodden, and a courageous fighter for peace. His speech in Oslo, like his other actions since taking office, make clear that he is not like that. But his realism and understanding that war has been around since the dawn of human history, and that achieving security sometimes requires going to war, do not bring him to despair. On the contrary, he believes that change is possible if the focus is on what is important and doable.

Obama presents a number of goals: war on Al-Qaida, limiting nuclear weapons, supporting those who oppose tyranny and economic development. When we break down his goals into plans of action, we understand that Obama sees things up close and takes the balance of power into account. Not an "all-out war on terror" but dealing in a focused way with the organization that brought down the Twin Towers; not imposing democracy but a struggle against tyranny. Obama supports intervention against regimes that are cruel to their citizens, and is concerned about the genocide victims in Darfur, mass rape in the Congo and suppression in Burma. He does not speak about human rights in China, Saudi Arabia or Egypt. It is easy to criticize poor and isolated countries in the depths of the developing world. But to strike out against giant powers or friendly rulers in the Middle East - that would be too much.

Obama believes in diplomacy and nonviolent means, like sanctions, as leverage for changing the conduct of problem nations. His model is Richard Nixon's trip to China in 1972, at the height of the cruel Cultural Revolution. This was a masterpiece of reaching out to an adversary, encouraging it to change and all at once altering the balance of world power. We can imagine Obama planning such a trip to Tehran. But his openness also has its limits. He sees no point in dialogue with Osama bin Laden.

Obama's speech has a number of important lessons for Israel.

First, he does not see Israel as an important ally, as did Bush, who viewed it as a partner in the global war on terror. Obama, too, believes in good and evil, but his world is painted in many shades of gray, not black and white. Second, Obama perceives the Israeli-Arab conflict as a struggle for racial and tribal identity, and above all, religious identity. To him, it's a "conflict between Arabs and Jews" that is only worsening, rather than a political and strategic conflict. Third, he does not rule out a unilateral defensive war, but he will strictly observe the rules of engagement and the Geneva Conventions. It's hard to see him backing actions like the Second Lebanon War or Operation Cast Lead, actions that hit civilians hard.

Fourth, and most important, Obama tends toward a gradual peace process whose results would be felt immediately, rather than postponing everything until all problems are solved. In the internal Israeli dialogue, those who support a final-status agreement argue that it is better to end the conflict all at once and that any phased approach would only increase suffering and draw Palestinian opposition. Their position is like playing the lottery - the grand prize is huge, but it's very difficult to win; usually you lose a lot of money buying worthless tickets.

The aspiration toward a final-status agreement does not exist in a laboratory, but in a reality in which facts are being created and the occupation is deepening. Obama understands this and prefers partial steps to waiting for the Big Bang, which may not arrive. So he insisted on a construction freeze in the settlements, even a partial one, and he will support economic peace and another withdrawal from the West Bank. He will not put everything on hold until the conflict is over. And if he remains true to his realist manifesto, he will certainly also support dialogue with Hamas.