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Israel's strategic situation at the beginning of 2004 is far better than at the start of last year, and not because of the decisions and actions of the government, but thanks to America. The loan guarantees from the United States saved the Israeli economy from collapse, and the U.S. Army is operating as a "salvation army," gradually dismantling the military threats to Israel, and granting it unprecedented strategic support.

A year ago, Israel still believed that Iraq had a frightening chemical and missile arsenal. Iran was galloping undisturbed towards possession of nuclear weapons, and Libya was rising as a new threat. Syria was openly aiding Saddam Hussein, and its president insulted the Jews. The tide turned with the conquest of Iraq. Although the Iraqi threat turned out to be a bluff, the neighbors are beginning to internalize the American presence in Mesopotamia. Iran was forced to limit its nuclear program, Libya announced its disarmament, and even Damascus changed its tune. Egypt and Saudi Arabia are under strong pressure for internal changes and democratization, and the energy of their leaders is directed to saving their regimes rather than to the fight against Zionism. It's enough to see how friendly Egyptian President Hosni Mubarak has suddenly become.

Israel is standing on the sidelines for the time being. It knows that it will be required to contribute its part to the regional change by withdrawing from the territories and by arrangements for weapons inspections, but only after the elections in the United States. President George W. Bush will not risk the electoral support of Jews by pressuring Israel. In 2004, therefore, Israel will benefit from a political time-out, which should be exploited for internal soul searching and for defining its national aims in a changing region.

It's true that the regional change is only beginning, and that the threats to Israel have not yet been removed. The Americans are finding it difficult to impose order in Iraq, they haven't been successful in dismantling terrorist organizations, and terrorism still remains legitimate in the Arab world. Iran continues to display its missiles and to deny Israel's right to exist. And above all, the conflict with the Palestinians continues, and even if the level of terrorist attacks has abated somewhat, escalation is liable to resume at any moment. Palestinian Authority Chairman Yasser Arafat is still in power, and the efforts to replace or remove him have failed.

Israel and the PA are becoming increasingly similar, despite the cultural differences and the economic gaps. Both sides are confronting the problem of increasingly serious crime. The leadership, both in Jerusalem and in Ramallah, fears a "civil war" with those who oppose compromise. The hesitations and the maneuvers to postpone the evacuation of the outposts are reminiscent of the Palestinians' "fighting terrorism" games.

The conservative security apparatus was actually quick to recognize the implications of the war in Iraq, and is now conducting a stormy internal debate about the future of the Israel Defense Forces. At a conference this week at Tel Aviv University, they spoke of a "new security paradigm." They should also discuss a "new peace paradigm." They should consider whether the model of the agreement with Egypt, which was concocted in the strategic reality of the 1970s, is still the ultimate solution. It's possible to think about changes, such as demanding that Syria and Lebanon grant citizenship to the Palestinian refugees within their borders, and absorb them, in exchange for the return of the Golan Heights. Or about arrangements for weapons inspections. Or about the annulment of hostile UN resolutions as a condition for negotiations, just as the resolution equating Zionism with racism was annulled.

The American "salvation army" and the weakness of the Arabs provide Israel with an opportunity to improve its status in the region. The question is whether the government will know how to take advantage of it or whether it will consider it another reason for inactivity. At the cabinet meeting this week, Finance Minister Benjamin Netanyahu explained why the proposals made by former prime minister Ehud Barak to the Syrians at the Shepherdstown peace talks should not be repeated: "The situation in the region was different at the time, the American pressure on Syria was different, the state of worldwide terrorism was different, and what Syria could have gotten then, it can't get today." Prime Minister Ariel Sharon nodded his head in agreement. These things once again raise the fear that this time, too, the government will miss the opportunity.