We do not know what special envoy George Mitchell told President Barack Obama after his tour of the Middle East. But here is what I hope he is telling the president now.

"Mr. President, unfortunately I do not have good news. It is easy to misjudge Israel. It is indeed a country that thrives in certain respects, but politically it has reached complete paralysis. Never in my long experience have I seen a developed economy and seemingly functioning democracy in a state of such anxiety and hopelessness.

"The Israeli electorate sees no way out of the cycle of violence and oppression. In the coalition talks there is much talk about the 'nationalist bloc' vs. the 'center-left' bloc. I think the most discernible bloc is that of fear, confusion and paralysis, which includes the Labor Party and Kadima. The election results show that Israelis do not believe that there is a way out of the stagnation, confusion and lack of direction that has characterized Israel since the failure of the Camp David talks in 2000 and the onset of the second intifada. The ascent of politicians like Avigdor Lieberman is always an indication that a democracy has lost its direction and seeks to channel its fear and hopelessness into hatred.

"Israel seemed unified only during the three weeks in which the Israel Defense Forces turned Gaza into rubble. Benjamin Netanyahu, Lieberman and Ehud Barak try to capitalize on this and compete with each other for the title 'most belligerent man in the country.' Netanyahu plays on the fears of Iran, Lieberman fans the fear and hatred of Arabs in general and Israeli Arabs in particular, and Barak throws around statements about how brutal his retaliation to any Palestinian aggression will be.

"Israel's democracy has become dysfunctional, not only because of the electoral system (which should indeed be changed). Israel has not truly been governed by a democratic process for a long time. Policy in the West Bank is run far from the public eye, as the IDF's recent internal document has shown. Quiet deals between the military and the settlers determine facts on the ground, and there is no real political control over what the army or the settlers do.

"In this respect Israel is a mirror image of the Palestinian situation. There is no longer a unified Palestinian authority. Hamas is incapable of overcoming its internal divisions to reach clear decisions on anything, and Fatah is losing support and legitimacy because Israel is incapable of making even the smallest step to convince the Palestinians that it is moving toward peace. The Palestinian public is gradually won over by the idea of 'resistance' i.e. violent struggle against Israel, no matter what the cost, and even if it doesn't lead to any tangible result.

"In brief: I believe that both Israel and the Palestinians are fragmented and paralyzed, and that bilateral talks would at this point be doomed to failure. I am afraid that if we don't do anything, a third intifada will start. The Arab regimes in the Middle East will not be able to deal with the rage that further Israeli military actions like the one in Gaza will generate in their streets, and the whole region could be destabilized.

"Mr. President, I know that you have your hands full because of the economic meltdown, but I am afraid that we, the United States, do not have the luxury of letting the Middle Eastern situation deteriorate. Israel could well move further to the right, and there is a scenario under which Lieberman, who champions a presidential system, might become Israel's leader, and the mess might become intractable because he is likely to polarize the situation even further.

"My suggestion is that we, the U.S., apply our full leverage and do the following: We should pressure Israel into engaging with the Arab peace initiative. We could do so if we provide Israel with the guarantee that we will use our might to prevent any attack from Iran, even if it goes nuclear, but that in return for this guarantee Israel will have to start dismantling the settlements in the West Bank.

"We should convince Arab countries to dispatch military forces to take over security in the West Bank and Gaza, and we should set up an ongoing peace conference under the auspices of the U.S., EU, Russia and the Arab League that is committed to continue until a settlement is reached. I have used this model in Northern Ireland, and it has worked there. And please convince Bill Clinton to stand by my side in this process, because Mr. Clinton used to be loved and trusted in Israel, and he might help me generate trust in the possibility of peace that has evaporated."

Reprinted from Haaretz