That was a jewel of a speech Barack Obama delivered in Cairo last week: intelligent, reasonable, subtle, and humble.

One can only imagine the satisfaction, even amazement, a Muslim must have felt, hearing an American president talk about coming to a region where Islam was "revealed."

Obama was signaling that he understands Islam at a level that few Westerners do. That Muslims are taught that the Almighty, in revelations, showed Mohammed the true path out of darkness.

Subtle but not sphinx-like in his speech at Cairo University in June 2009, U.S. President Barack Obama takes in the sights outside the city afterwards. (Gerald Herbert/Associated Press)

A more pedestrian visitor than this president would probably have used the word "born" instead.

The speech was littered with similar nuances. Obama quoted repeatedly from the Qur'an and employed the most powerful of psychological devices: telling people what they yearn to hear.

He talked about the world's debt to Islam, invoking its early contributions to medicine, mathematics, architecture and fine arts.

I cannot begin to tally the number of times Muslims reminded me of those achievements during my years in the Middle East.

Although to my ears, these reminders often had a plaintive ring — some underlying recognition that stagnation had set in somewhere along the way, while the West went on to build brilliantly on what the Muslims had begun.

Reflective criticism

Obama's speech contained a number of criticisms of Arab society, too. But they were elliptical, another rhetorical device highly prized in Oriental culture.

Where George W. Bush would have waded in with a club, Obama chose to highlight the Arab world's deficiencies by drawing attention to American failures, then allowing the listener to reflect.

For example, "I have unequivocally prohibited the use of torture by the United States."

In one sentence, Obama manned up to American abuses that every Arab has read about and, at the same time, prodded his listeners to ponder what still happens in police stations and interrogation rooms all over the Arab world.

I tend to doubt that happened, though, given the ability of so many in the Arab world to ignore deep injustice in their own society while dwelling with near religious intensity on the many insults inflicted by the foreigner (read Westerner) over the past century.

The real point of the speech, however, wasn't to make Arab nations stop torturing, or repressing (or killing) their women, or crushing any movement toward democracy, or overlooking, even encouraging, a weird, obsessive hatred of Jews.

Those things will likely continue, at least in this lifetime.

Rather, Obama is taking his shot at finding some durable solution to the Israeli-Palestinian blood feud, which more than anything else crystallizes Muslim anger at the West.

Clearly, he believes that he must first convince his listeners that he is now approaching this problem as an honest broker.

Taking on Israel?

Now that is an epic task. Generally, Obama's predecessors in the White House have stitched themselves so closely to Israel that Israelis commonly joke about being "the 51st state."

The Arabs apply a different description: "America's spoiled child."

Arabs hear Washington lecturing other countries about acquiring weapons of mass destruction, while ignoring Israel's nuclear arsenal.

They hear successive American leaders castigating Palestinian violence against Israeli civilians, but invoking Israel's right to self-defence when Israeli bombs or bullets, often fired from American-made aircraft, kill Palestinian women and children.

And for the most part, they've heard Washington raise only the limpest of protests as successive Israeli administrations have steadily colonized the West Bank since it was conquered by military force 42 years ago. Until now.

With remarkable speed, Barack Obama appears to have pushed the Israeli government to the wall on the settlement issue.

In the Cairo speech, he flatly declared that Israeli settlements are not legitimate. And, unlike most previous presidents, he appears to mean it.

His administration has made it clear there will be no exemptions for "natural growth" of existing settlements, no artificial distinctions between "outposts" and "established settlements," and no "security-related 'thickening.'"

What can Obama do?

Predictably enough, Israeli Prime Minister Benjamin Netanyahu has balked at this challenge, and the situation is now at the what-are-you-going-to-do-about-it stage.

It's a good question. The entire Muslim world is watching. What is Obama going to do about the Israeli settlements?

Well, he could reduce (or threaten to reduce) the billions of dollars in aid that Washington sends to Israel every year. Since that money is fungible, it can be reasonably argued that Washington actually helps build the settlements.

He could lift the charitable tax exemption enjoyed by American taxpayers whose donations to Israel benefit these settlements. Or he could reduce (or threaten to reduce) military aid to Tel Aviv.

Most likely, he will simply intensify the debate.

That alone might actually do the trick. The fact is, ordinary Israelis treasure Washington's patronage and heaven help the Israeli politician who is seen to be putting that relationship in jeopardy.

Tuned-in Tel Aviv

Ultimately, a great many Israelis simply don't care about the stony, largely barren West Bank or the swaggering, messianic, gun-toting characters who regularly show up on Israeli TV claiming yet another hilltop.

Certainly the broad Israeli public doesn't consider them worth threatening the country's most important foreign relationship.

Israelis, too, listened closely to the Cairo speech and have followed every detail of the Obama-Netanyahu tension.

Israeli newspapers, in fact, are filled with descriptions of an impending "crisis" between Jerusalem and Washington. The country's biggest daily, Yediot Ahronot, said this week that Netanyahu's stubbornness risks a "head-on collision" with Israel's most crucial ally.

Of course, Obama can count on heat himself from Israel's allies in the U.S.

One other president, George H.W. Bush, tried to stop settlement-building 18 years ago, but eventually caved under the political pressure at home. (Significantly, the Israeli prime minister at the time, Yitzhak Shamir, was subsequently ousted by his own voters, many of whom were unhappy about the confrontation with Washington).

Over the years, however, world opinion has changed considerably when it comes to the settlements.

Just about the whole world, including a great many influential people in Obama's own political party, opposes them.

In fact, there are sober American voices today saying that stopping the settlements may be the greatest favour Obama can do the Israelis, given how easily their multi-party political system can be held hostage by a minority of nationalist/religious zealots. And if Obama succeeds on this front, if an American president actually puts a stop to the most visible manifestations of Israeli expansionism, then he can turn his attention to the Palestinians and the rest of the Arab world with a new authority, rather than just an adroit understanding of the Qur'an.