Barack Obama was said to have the in-tray from hell even before the conflict between Hamas and Israel resulted in substantial loss of life in Gaza, as the Israelis took revenge on the terrorist organisation for its recent rocket attacks. If Obama harboured any idea of allowing the Arab-Israeli conflict to fall down towards the bottom of his agenda as he dealt with the economic slump or Iran or Afghanistan, he will by now have been disabused.

Able politicians do not fear inheriting what appears to be an impossibly complex agenda: they relish it. A significant moment during the US presidential campaign came when John McCain broke off electioneering to deal with the credit crunch. Obama was quick to point out that a president needed to be able to manage more than one challenge at a time. He will certainly now be tested on that very point.

The presidential election draws the clearest possible line between the past and the future: between what Obama will represent as all the failures of the Bush administration and all the possibilities of his own incumbency. Anything that he does to improve the situation at home or abroad will mark the contrast between old and new ways of doing business.

The conflict between Israel and Hamas is, in a way, an attractive issue for Obama and his team. It has been evident for decades that matters cannot be resolved without the closest involvement of the United States. Yet George Bush decided to hold aloof for most of his time in the White House, turning to it only in his last months and setting out impossible deadlines for progress. The issue was not ripe for settlement and Bush was an increasingly lame duck. Even so, the resumption of the process has been useful.

Bush’s reluctance to get involved stemmed largely from his recollection of how Bill Clinton had failed to reach a resolution despite investing a huge amount of personal prestige and political capital in negotiations during the final days of his presidency. Bush did not want to suffer a similar rebuff although in the event he did, being forced to take up the issue too late, as Clinton had, and hoping like his predecessor that a deal there could polish a tarnished legacy.

The Clintons probably see it differently. They know that in those last days of the administration they came achingly close to achieving a breakthrough. In frenetic negotiations, Israel was induced to pile up concessions on the table. It was an interesting strategy: to move away from the gradualistic approach that had characterised earlier peace processes and instead to move at one go to an overall settlement. Clinton’s disappointment must be all the more poignant because having come close to agreement, the failure of the talks led to a hardening of positions on both sides, the unleashing of the inti-fada and the opening of an era of Israeli repression of the Palestinians.

The conflict between the Palestinians and Israel is intriguing because for some time most of the world has known how it should end and has agreed to a solution. Most of the Arab world has now acquiesced in agreeing that there must be an Israeli state and a Palestinian one existing side by side, that the borders preceding the 1967 war provide the basis of the new boundaries but that land will have to be traded around that template, and that Jerusalem will require special arrangements to allow the Palestinians to have their capital there and to allow freedom for all religious groups to access their holy sites.

Of course, behind that outline lie many complications, but this conflict is unusual in that the eventual peace deal is understood and accepted by much of the world and most interested parties. It is not the destination but the journey that is most problematic. Clinton attempted to arrive without travelling and nearly succeeded. The problem was that Yasser Arafat lacked the authority, the support and the imagination to be able to sell it to his constituency.

Indeed, the issue has been dogged by weak leadership in America, in Israel and among the Palestinians. Since Clinton left the White House the brightest moment of hope came when Ariel Shar-on, an extraordinarily powerful Israeli prime minister, unilaterally handed Gaza back to the Palestinians and even sent the bulldozers to remove Israeli settlements on land seized in 1967. His determination and energy were so great that when Likud, his party, withdrew its support he abandoned it and created a new one, Kadima. What he single-handedly might have achieved, had illness not struck him down, must be one of the great “might-have-beens”.

Hamas does not accept the proposed solution and the situation has been complicated still further by the split between Gaza, where Hamas won the elections, and the West Bank where the Fatah party administration led by Mah-moud Abbas would accept two states.

Obama and Hillary Clinton, his secretary of state, are likely to take the view that the election of Hamas has not been well handled by Israel or the United States. The democratic world has not devised a way to deal with election results that it does not like. The Palestinians of Gaza have been treated as pariahs since they made their choice at the ballot box. That has solidified their resistance and, of course, dislodged Israel and the West from the moral high ground.

It is true that Hamas refuses to recognise Israel as once did those countries in the region, such as Egypt, with which Israel has now enjoyed decades of peaceful coexistence. In diplomacy you have to be imaginative and see that your opponents are capable of changing their positions. Without that insight we would still be in turmoil in Northern Ireland. The wise old men of Israeli politics such as Shimon Peres used to say that the only way to negotiate was to begin with the idea of peace, to want it more than anything and to create in your imagination a peace that had somehow been achieved. That way you created the will to overcome apparently insuperable obstacles.

Unfortunately, that thinking does not prevail at the moment. As the foreign minister Tzipi Livni, under the Kadima banner, battles the former prime minister Benjamin Netanyahu, representing Likud, to lead Israel’s next government after the elections in February, the campaign rhetoric is unsurprisingly bellicose. In the West Bank, elections will be held next month. Obama’s inauguration will coincide with further political upheaval in the region.

What is clear is that neither Obama nor Hillary Clinton unquestioningly takes Israel’s side in the way that the Bush administration did. Even Israelis should welcome that. The hope of a more peaceful future that Obama has engendered around the world arises because even the enemies of Israel, and of the United States, believe he will be more evenhanded between Jew and Muslim and between Christian and Muslim than any predecessor.

It could be that for once the Palestini-an-Israeli problem will receive the full attention of an American presidency at the outset, at the moment of its greatest prestige and when its mandate is strongest. Elections in Israel and the West Bank complicate matters just now, but new mandates could also enhance the authority of the leaders and improve the prospect for progress.

From what we have seen of Obama so far he will not be despondent to discover that yet another crisis will demand his attention after January 20. The conflict has simmered throughout the uneasy ceasefire, but the clamour from the Palestinians in Gaza could not be ignored for much longer. The severity of Israel’s response – typical of its actions during election campaigns – places the issue on Obama’s desk and demands prompt action from him. In that respect these exchanges of violence, although painfully familiar to us, could prove unusually significant.

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