US President Barack Obama's Nobel Prize is a source of pride and honor for all Americans and all of us who hope for peace in this world. It is an award more of expectations than for any significant accomplishment in this early period of his tenure. His own words summarize it best. On responding to the news of his award, he acknowledged, "this is only a call to action". If his recent performance in restarting the Middle East peace process is any indication then one will have to urge him to be more resolute in action rather than continue with rhetoric and shadow dancing.

This is even a greater challenge for Obama because of present political situation in the Middle East where the most hawkish government in Israel's history is in power and there is continuing Palestinian factionalism.

In the recent round of Middle East peace talks Obama backed down on the settlement freeze. He was publicly humiliated, much more so than by failing to bring home the Olympic Games to Chicago.

He is smart enough to know that he was making Benjamin Netanyahu's position precarious. Either Netanyahu would do what Obama told him, in which case his coalition would fall apart, or he would defiantly refuse, in which case the Israeli public, which will never tolerate a PM who fights with the United States, would throw him out. Netanyahu's only refuge was to make a fool of Obama. He and Avigdor Lieberman, who is his real governor, are since then smirking at their triumph. It will come to haunt him.

Netanyahu was cleverer; he threw the ball into the Arab court and the international community. He put all kinds of obstacles to Palestinian rights and the end of the occupation. He tentatively mentioned the "state" word, but without mentioning borders or sovereignty.

But do not for a moment believe that Obama is a spent force. There are things he can yet do, and Netanyahu's victory over him is a pyrrhic one.

The settlement freeze idea, which put Netanyahu on the spot, was not in fact well designed to address the basic problem of occupation. The existing settlements are the problem, not simply their further growth. They are an encroachment meant to displace the Palestinian people from their ancestral lands, and illegal under international law, as incorporated in the Fourth Geneva Convention. We hear often enough of Palestinian plans to drive Israelis into the sea. The settlement project, from its inception, has been the plan to drive the Palestinians into the desert.

What is the US position on the question of settlements? Obama has said that "The United States does not accept the legitimacy of continued Israeli settlements" and "It is time for these settlements to stop". It is the same language that Hillary Clinton has recently used. But what does it actually mean?

Does it mean that settlement expansion should stop? Or, in fact, for existing settlements to be disbanded? Could the first sentence even mean that the US is beginning to revisit its studied ambiguity, for the past 30 years, over whether it views all Israeli settlements on occupied territory as illegal?

It is not the intention of all Israelis to drive the Palestinians into the desert; many of them understand that the settlers are poison to Israel itself.

What Obama can do is, first of all, to predicate every decision about this conflict on international law. Neglect of the law, the search for some alternative to law that would be more palatable to the Israeli right wing, was the devil that foiled all the negotiation efforts from the Madrid Conference through the Oslo period. If the law is not followed, what alternative do we have? There is only the employment of power, superiority of political and military power to enforce the will of one side. The power disparity in this situation is overwhelming. Before the law, though, the parties are equal.

Israelis may fear that the law would prejudice the case against them, but this is not true. The law will protect the rights and legitimate interests of both parties.

Let's be clear in our expectations. Obama and the United States citizenry will never undermine Israel or cast its interests aside in favor of some other interest, that of Arabs and Palestinians, or its own interest in oil supplies or the geopolitics of the Arab states. Obama said that plainly enough himself at Cairo and says it often, even as he reaches out with manifest friendship in support of Arab and Palestinian rights. He is very conscious of the political minefields of public opinion and intense lobbying within the United States and will always be wary of taking the Arab or Palestinian side in a way that will be understood as anti-Israel, since he knows that doing so would make the achievement of the most righteous Arab goals less attainable rather than more. A whole series of American presidents has been led, by these considerations, to make those destructive compromises with the law, but in Obama we have someone from whom we may expect better.

A subsequent article will spell through the major points of international law that rightly govern this situation. But let it be noted here that the law does not predetermine the outcome. Rather, it requires negotiation between parties who come before it as equals, relieved of the power disparity that has reduced them thus far to simply exercises of coercion.

Understand it this way. The guiding assumption of the negotiations that have happened so far has been that everything Israel has belongs to Israel: Right of possession. Many Israelis, including prime ministers like Yitzhak Rabin, or perhaps Ehud Barak, who was such a disappointment, have understood that for the peace of Israel the Palestinians must have something real. But that assumption that it belongs, by possession, to Israel has meant that what the Palestinians received would be gift from Israel. That meant that the negotiation was never between Israelis and Palestinians, but between Israelis and other Israelis: Those who wanted to give something, though who would want to give more, and those who wanted to give little or nothing at all.

The outcome of that process was then presented to the Palestinians on a take-it-or-leave-it basis, but it had been reduced to a diktat. Even if the offer were better than what is called the "generous offer" made at Camp David, as was the outcome envisaged at Taba or the unofficial one in the Geneva Accord, no one can accept a diktat.

No one more wanted that Palestinians get more rather than less than President Bill Clinton, but he too accepted this premise that all was in the gift of the Israelis, and that poisoned the whole process.

For Obama, then, in his manifest friendship and care for Israel and its people, which in fact practically everyone in the United States shares, insistence on the law is both an available policy, something he can really do, and an exercise of a great deal better care for the Israelis than any indulging them in those things that are poison to their society as well as torture for the Palestinians. Rule of law is what will bring peace and reconciliation with their neighbors to the Israelis as well as justice both for them and for those who have been their victims. This would get to the heart of the problem, as the settlement freeze could not.

There is a second thing that Obama can do which is vitally important to fostering the peace. That is to bring Hamas into the process of resolving the conflict.

The effort to exclude Hamas after they won a free election and were the democratic choice of their people was an injustice from the beginning. Without unity of the Palestinians there can be no progress toward peace between Palestinians and Israelis.

What is within Obama's opportunities and would be as great a contribution as his setting his course by the rule of law is to treat the Palestinians, and among them Hamas, with a kind of respect that they have never experienced from an American government. This is the special charisma of Obama, to treat others with genuine respect. Those who have taken the trouble to know the Hamas leadership come back with a sureness that they are not fanatics, important as their faith is to them, and that they would respond positively to any such approach. It may well be that Obama's approach to them would have to be, at first, through Track 2 diplomacy but it would get well beyond that.

What it would accomplish would be, first, to put an end to the old argument, which we have heard for as long as Israel has existed, that there is no partner for peace. Hamas will be such a partner, and must be so in alliance with Fatah, as neither can produce the unity of the Palestinians by themselves. That show of respect by Obama, revealing that there really is a process leading to peace and justice, would introduce them into the heart of it. By the very fact that the United States showed that respect, those Israelis most insistent that there is no partner would be obliged to change their tone, even a Netanyahu and an Avigdor Lieberman.

A demand for total freeze of all further settlement growth backed up, if necessary, by firm enforcement measures will be a good start.

Israelis do respond when they see a real prospect of peace. Obama still has it in him to do that, and has these means to do so: The law and a personal capacity for respect. May God help him to recognize this and do what is in him.

— Fr. Raymond G. Helmick, S.J. is instructor in conflict resolution, Department of Theology, Boston College and author of "Negotiating Outside the Law: Why Camp David Failed" (London, Pluto Press 2004). Dr. Nazir Khaja is chairman of Islamic Information Service, Los Angeles.