President Obama returns from his first overseas trip even more popular (i.e., powerful) than when he left. It is not only that his predecessor set the bar so low. Barack Obama (and First Lady Michelle Obama) were the most impressive figures to represent the United States abroad in at least a good half century.

John Fitzgerald Kennedy was good, and very impressive, but most of the excitement about Kennedy had to do with his (and Jackie's) physical attractiveness and style. The Obamas are also attractive people, but it is clear from reading the European press that it was not looks or style that most impressed Europe. No, it was their intelligence, empathy, and the sheer significance of their unlikely presence as president and first lady of the United States that grabbed the Europeans. It does not hurt that the Obamas follow Bush (and especially Cheney), but he and Michelle would have looked just fine even if they had succeeded Franklin and Eleanor.

After Europe, Obama has even more capital in the bank than he had before, and it's not like he was hurting prior to leaving for the G20 summit.

Now it is time for him to start using some of this capital on the Israeli-Palestinian issue. The Israeli elections are over and the new government has been installed. The economic situation here at home remains bad, but not so bad that the president cannot turn his attention to the Middle East. Additionally, many of our economic problems are associated with energy--supply and cost--and resolving the Israeli-Palestinian issue will help mightily.

Powerful opponents of vigorous U.S. efforts to end the Israeli-Palestinian conflict insist that it is not central to America's problems in the Middle East. They are so insistent on this point precisely because they know that it is not true. In fact, no one can seriously argue that the Arab-Israeli conflict is not at the core of America's problems with the Arab world in particular and the Muslim world in general.

Neither Arabs nor Muslims at large present a united front on any issue except Palestine. Sunnis and Shiites disagree on Iran and the Saudis. Radicals and conservatives disagree on Egypt and Saudi Arabia. Many Arabs despise Hezbollah and Hamas; others venerate them. As for non-Arab Muslims, Indonesians and Turks for instance, they certainly don't agree with Gulf Arabs or Jordanians or Syrians about much of anything except Palestine.

No, not about the specifics. But they all feel the continuing suffering of the Palestinian people and were pained and outraged by the Gaza war.

There is nothing surprising about that. The entire state of Israel, and many Jews worldwide, are anguished by the continued captivity of one soldier, Gilad Shalit. Jews from Long Island to Paris were pained by the repression of Soviet Jews. Why wouldn't Arabs (and Muslims) empathize with the suffering of millions of their kinsmen or coreligionists who live either in the same region or not far away? For Jordanians, Egyptians, Syrians, Lebanese, Saudis, and Iraqis, they are people who live virtually next door. Why wouldn't they be horrified that 1,400 Palestinians were killed in the Gaza war and that a third of them were children? It is not as if they are the only ones to feel that way.

The ability of the Palestinian issue to unify Arabs and Muslims is precisely what has turned the issue into the best recruiting tool terrorists have ever had. I don't think (or care) if Osama bin Laden feels for the people of Palestine. Certainly, Nasrallah doesn't (he cheerfully killed Palestinians along with Israelis during the 2006 war). Nor do I think Ahmadinejad has the slightest interest in the Palestinians (if he did, he could not threaten to annihilate Israel when he knows that doing so would also kill a few million Palestinians). But I do think that all these thugs happily invoke the Palestinian issue because the Arab "street" does care about it. And they understand that it is the locomotive that drives anti-American feeling throughout the region.

Solve the Palestinian problem, and you rob the radicals of the most powerful weapon they have to use against America (especially now that Obama, and not Bush, is in the White House). Allow it to fester and you further jeopardize U.S. interests and Israel's security.

And that is why President Obama needs to act. But what should he do?

I think it's clear. He should go for a comprehensive approach. A step-by-step plan is death by a thousand cuts. A solution will only be reached by a president who uses his prestige to solve not only the Israeli-Palestinian conflict, but also the larger conflict of which it is the core.

There is only one vehicle that can carry that much weight and that is the Arab Peace Initiative (the former Saudi Plan).

The Arab Initiative, endorsed by every Arab state and the Palestinians, offers Israel full peace, recognition, and normalization of relations in exchange for the establishment of a Palestinian state in the West Bank and Gaza with its capital in East Jerusalem.

The Arab Initiative, in itself, is not a full-blown, detailed peace plan. It is an offer to Israel: full peace in exchange for full withdrawal. To get to the offer, negotiations need to take place between Israel and the Palestinians, first. Once they reach agreement, the rest of the initiative comes into play. In the words of the Saudi government, "If Israel and the Palestinians can find a peaceful territorial compromise along the lines of UN Resolutions 242 and 338, under which Israel would withdraw from the lands it occupied in the 1967 War, including East Jerusalem, and make peace with a Palestinian state, then the Arab world would not only accept Israel's existence, but have normal relations with it."

In other words, it's up to the Israelis and Palestinians to come to a deal. Once they do, the Saudi offer takes effect.

That is why it is silly to argue about the exact language of the initiative itself. It is not a peace treaty. Its terms, in the initiative's own words, must be "agreed upon," which means that Israelis who complain about the language on refugees have erected a straw man. If the provisions on refugees need to be accepted by Israel, as the initiative states, then what is there for Israel to worry about?

Nothing.

President Obama should unequivocally endorse the Arab Initiative as the rubric under which negotiations should begin. No, Likud Prime Minister Binyamin Netanyahu may not like it. But neither did his predecessor Yitzhak Shamir like the idea of the Madrid Conference, which President George H. W. Bush convened right after the first Gulf War. It was there that Israelis and Palestinians began formal negotiations. Madrid totally changed the terrain for the better.

How did Bush get a reluctant Shamir to attend? He insisted. With his postwar popularity in the stratosphere, Israel had no choice but to attend the conference, whether it wanted to or not. The result was, essentially, the birth of the two-state solution that Obama can bring to fruition. He is in the same position Bush was in 1991: popular and powerful. Strike while the iron is hot.