But most of my Middle Eastern friends also understand that Obama's election will not automatically lead to substantive changes in American foreign policy. A well known Egyptian blogger skyped me: “I remain cynical about Obama, but I'm no longer cynical about Americans.”

To overcome this cynicism Obama will have to pursue policies that diverge significantly from those he espoused during the campaign, focusing on five areas:

First, in Iraq, contrary to what most Americans have assumed, Obama has not called for the withdrawal of all American forces from Iraq. Rather, he has called for the more limited withdrawal of combat troops, a policy that ultimately differs little from those advocated by President Bush and Senator McCain. All would leave tens of thousands of American soldiers permanently stationed in Iraq, much as they are in Germany, Qatar or South Korea.

Such a normalization of the occupation is morally and politically unacceptable to most of the world, including most Iraqis and a large percentage of the American public, all of whom expect American forces to withdraw fully from Iraq in a timely manner.

In approaching America's future in Iraq, President Obama will have to choose between two problematic options: He can follow in the footsteps of President Bush and negotiate an agreement for permanent US bases, or he can declare his intention to implement a full troop withdrawal. The former will be seen across the world (especially in the Muslim world) as a violation of the spirit of his campaign pledges and a sign of continuity with the policies of his unpopular predecessor. The latter would likely initiate a conflict with senior American military leaders (and their corporate allies who've made hundreds of billions of dollars off the Iraq war) that will make Clinton's struggles with gays in the military during his first year in office pale in comparison.

Obama's second big quandary surrounds US policy towards the Israeli-Palestinian conflict. Professor Obama might have befriended a Palestinian academic or two, but during his candidacy Senator Obama demonstrated little of the political vision or will necessary to revivify a comatose peace process. An aggressive negotiating agenda is needed, one which couples pressure on Hamas to renounce violence with equal pressure on Israel to withdraw from most settlements, accept East Jerusalem as the Palestinian capital, and allow the return to Israel of a small but significant number of Palestinian refugees.

It's hard to imagine Obama beginning his presidency by pressuring Israel to make concessions that most of his own advisers, not to mention most members of the Congress, don't support. The task will become more difficult if the right wing Likud Party, and its leader Benjamin Netanyahu, win the upcoming elections.

Even if Obama were inclined to push Israel to withdraw most settlers or share Jerusalem, his choice for Chief of Staff, Rahm Emanuel, will make it difficult for him to act on his inclinations. Emanuel comes from a right-wing Israeli family; his father was a member of the pre-1948 Jewish terrorist group Etzel. What's more, he served briefly as a civilian volunteer in the IDF, and is known on Capital Hill as a chief enforcer of the views of the the Israel lobby.

It is hard to imagine Rahm Emanuel advising the new President to put as much pressure on Israel as on Hamas. But without such an even-handed policy the peace process, or what's left of it, is doomed.

Obama is therefore faced with a second difficult choice: If he won't pressure Israel to make the necessary concessions to enable the creation of a viable Palestinian state, he will eventually have to acknowledge that the Oslo peace process is dead, and with it the two-state solution. The only option left will be to call on both sides to begin the painful yet inevitable task of imagining a post-Oslo political framework—essentially, some sort of binational state.

There is no third way. Continuing with the status quo is both morally and strategically untenable, even if it remains politically expedient for the time being.

Afghanistan presents the third policy quandary for Obama. During the campaign then Senator Obama differentiated himself from John McCain by declaring his intention to shift the focus of US military action from Iraq to Afghanistan. The problem with this seemingly sensible change in priority is that without a fundamental reorientation of America's goals in the war on terror, no amount of extra troops or strategic attention will succeed in securing the country.

Americans—and most Muslims for that matter—are likely appalled at the Taliban's actions and beliefs. But these sentiments do nothing to change the situation on the ground. The reality is that the US cannot defeat the Taliban military, as the latter is a deeply rooted socio-political movement that thrives precisely on the sort of violence Obama wants to unleash more of across Afghanistan.

To have a chance at securing Afghanistan Obama must separate the Taliban from al-Qa'eda (as much in the minds of US policy-makers and war planners as on the ground). But to sever the Taliban from al-Qa'eda Obama must first accept that the larger policy governing the war on terror—specifically, that it should be conceived of as a war and fought as such—is fundamentally flawed.

Put simply, Obama must end the “war on terror.” He must accept that American military action in the Muslim world can no longer be conceptualized and prosecuted as a global conflict against an ill-defined “enemy,” in which the United States arrogates to itself the right to invade countries at will, and kidnap, kill and torture people based merely on their religion and the suspicion that they have attacked or might attack the United States.

Instead, the conflict must be redefined as what it should have always been: a criminal investigation whose goal is to capture and try people directly responsible for the terrorist attacks on September 11, 2001 and other violence against American civilians.

At the same time the US focuses on a more manageable and legitimate set of military targets, the Obama Administration will need to broaden American policy options regarding how to address the endemic poverty that has helped the Taliban win the allegiance of so many Afghans. The most important step here would be for the US must end its policy of destroying Afghanistan's only profitable export, opium. Instead, in collaboration with various governments and the United Nations, a system must be established to purchase, each year, the country's opium crop. Profits from the sale can be administered through an international trust in order to benefit farmers rather than warlords, while the opium will help alleviate global shortages of medical opiates.

Coupled with a more focused military campaign and the inclusion of the Taliban in discussions over the country's future, such support for poor Afghan farmers just might stem the tide towards extremism and violence. But none of this will happen unless Obama is willing to challenge the Bush Administration's—and America's—vision of the United States as engaged in an all-out war with Islamic extremism in which victory can be secured, ironically, only by the sword.

Obama's fourth major challenge concerns Iran's quest for nuclear weapons. It is here that his focus on diplomacy and engagement has the given people the most hope; but the reality is that no amount of talking will convince Iran to give up on its quest unless Americans can offer a quid pro quo of equal value to Iran's giving up a strategic asset as valuable as nuclear weapons.

The quid pro quo is clearly Israel's nuclear weapons.

Any suggestion that Israel give up its nuclear arsenal in return for hard to verify pledges by Iran not to develop its own nuclear capabilities are nonsensical. However, there is a compromise that could give all sides something valuable in return for making major strategic concessions.

Such a compromise would involve Israel's joining NATO, after which it would turn its nuclear weapons over to NATO control. In return, Israel would be placed under the alliance's nuclear umbrella, meaning that any attack on the country would be responded to in kind by NATO. This would ensure that Israel maintains its deterrence capability; indeed, it would increase its overall security by preempting a conventional invasion as well.

Such an action would also provide the Iranian regime with the kind of political “victory” that would allow it to relinquish its own nuclear ambitions and submit to a robust and permanent inspection regime. And this process could also lead to a comprehensive agreement to ensure that the Middle East remains a nuclear free zone.

Americans might be loathe to hand any sort of victory to Tehran. But the essence of a successful negotiation is that each sides gets something of similar value to what is giving up. And the alternatives to forging an Israeli-Iranian quid pro quo are either a military assault on a well-trained, heavily armed and extremely motivated Iranian military, or the equally unpalatable choice of learning to live with a nuclear-armed Iran.

Iraq, Israel/Palestine, Afghanistan and Iran confront President-elect Obama with well-entrenched problems, none of which can be solved militarily, and all of which involve diplomatic solutions that will be nearly impossible to pursue under the current political circumstances. On top of this, President Bush's democracy agenda lies in a shambles, as governments across the region—outside of the smaller Persian Gulf states—have spent the last eight years increasing their authoritarian capabilities rather than encouraging real democratic openings. Without democracy there is little chance for peace or development in the Arab and larger Muslim world, but it's hard to imagine the United States supporting democracy when any representative political system would oppose most of the policies Obama could pursue upon taking office.

In the Middle East, as in the United States, Obama will certainly have his work cut out for him on January 20, 2009.