First, a Palestinian state side-by-side with Israel must become Barack Obama's top foreign-policy priority. The longer the Palestinians remain a displaced people, the more dangerous the world becomes. Over time, Palestine has acquired the status of a cause celebre for political Islam and a symbol of America siding with the powerful against the weak. Unless the Palestinians are seen to get a modicum of justice, the entire middle east is doomed to eternal cycles of violence and destruction.
The fact that there is bitter rivalry between the two main Palestinian movements, Hamas and Fatah, makes the problem ever harder to solve. But as long as the issue of statehood is unresolved and conflict continues, the more Muslim anger over Palestine will mutate into new and still less predictable forms. I estimate that the crushed body of every dead Palestinian child in Gaza, flashed on TV screens across the world, costs the United States about $100 million in terms of the protection it must buy to defend itself against retributive Islamist terrorism.
Second, the US must talk to Iran. As Iran gets closer to making a nuclear weapon, there is a danger that a war of words between Washington and Tehran could trigger a real war is real. The choice as US secretary of state of Hillary Clinton, who made hawkish statements about Iran during the election campaign (echoed in part by Obama himself) on balance increases the danger.