"The message we're getting from the Americans is there's no point of moving right now, let's see what happens with the elections," the official says. But the Obama administration has already begun to signal that if Tehran agrees to sit down, its fallback position has changed significantly from the Bush administration's, and the outcome of any talks may no longer have to be the complete cessation of Iran's uranium-enrichment program.

Netanyahu is signaling back that this fallback position is unacceptable to him. In particular, the Israelis do not want to allow Iran to follow the "Japan model"—becoming a so-called screwdriver state that has a nuclear program with the capability of building a nuclear weapon in weeks if necessary. "Let's say the path to nuclear weapons is a 1,000 yards," says an Israeli official. "You wouldn't want a situation where they could stop at 999 and just expand their base." Israeli officials, both in Washington and Jerusalem, suggest that for Netanyahu, the end of 2009 is his informal deadline for progress on the nuclear issue, even as the Americans are trying to launch regional-focused talks addressing all issues with Iran that will likely take years.

The Israelis fear that the Obamaites will be duped, as so many others have, by Tehran's Scheherazade-like approach to talks, endlessly stringing them out. "Clearly that is the Iranian strategy," says the Israeli official. Now, to the consternation of Israeli officials, the State Department is urging Israel to join the Nuclear Non-Proliferation Treaty—a source of enormous embarrassment to a country that is believed to have scores of nuclear weapons but doesn't want to admit it (U.S. officials, in the past, have always avoided pressuring Israel on the NPT).

The sequencing issue is also a potential train wreck. Netanyahu's view remains what Arad laid out to me last summer: as long as Iran is threatening the region and underwriting Hizbullah and Hamas, encouraging the extremists in their refusal to recognize Israel, a Palestinian peace agreement would not be worth anything. In his AIPAC speech, Netanyahu sought to make his Iran-first argument in another way: by saying the threat from Tehran provided a remarkable "opportunity" to unite Arabs and Israelis through mutual fear. Obama's opposing view was laid out by Emanuel in comments reported by the Jerusalem Post: he said that strengthening the "international coalition that will be necessary to thwart Iran's nuclear program will be made easier if progress is made in peace negotiations between Israel and the Palestinians."

Netanyahu will try to gloss over the differences by going through the motions of negotiating with Mahmoud Abbas, the weakened Palestinian president, but the push by the U.S. at some point is going to come to shove if Obama is serious about a Palestinian state by the end of his first term. It will happen sooner rather than later if Israel continues to accelerate the building of settlements on the West Bank, as it has been doing in recent months. Another trigger would be any efforts by the Obama administration to conduct secret talks with more moderate elements of Hamas, as a number of experts on the region are urging and as many Europeans appear to want.

The Syrian track may be the most hopeful right now, at least between the U.S. and Damascus. "In initial exploratory talks there was a lot of common ground," says the Syrian official. That could result, however, in additional pressure on Netanyahu from Washington to give up the Golan Heights. Syrian President Bashar Assad will want something substantial in return if he is to tack away from Tehran and supply cooperation at the Iraqi and Lebanese borders, especially after the way the Bush administration humiliated him.

Bottom line: the rupture is not going to happen right away. Both Obama and Netanyahu have big political reasons to make their first summit come out looking like a lovefest. But the first flashpoint is not far off: the end of the year on Iran. And after that things could get very heated over the Palestinian issue.

© 2009