OBAMA THE WEAK

Have you noticed the American response to the Iran fraud? Have you noticed Obama's acceptance of a nuclear Iran and by extension a weaponized nuclear Iran? Have you noticed where Obama's emphasis is strong?

Seismic events in Iran and Israel have set a critical test of Obama's resolve

One weekend has seen the Middle Eastern landscape transformed – and the US president's critics are already condeming our President.

So there are limits to the magician's powers. For a ­moment there, when the footage from Tehran showed young women wearing Victoria Beckham sunglasses, peroxide hair poking from their hijabs, lining up to cast their votes in a record turnout election, it looked as if Iran was about to end the sullen estrangement of the last four years, turf out Mahmoud ­Ahmadinejad and present a new, more open face to the world. If that had been the outcome of Iran's election, it would have been notched up, in part, as an early triumph for Barack Obama: his ­allies would have declared that the hand the president stretched out to the Muslim world in Cairo less than a fortnight ago had unclenched the Iranian fist.

That's not how it turned out. Instead, the US president today surveys a Middle Eastern landscape that has changed over a single weekend, thanks to what looks like a stolen election in Tehran and a policy climbdown by the prime minister of Israel. These shifts raise searching questions about Obama's entire approach to foreign policy – and suggest that at least one key aspect of it is not working.

The at-a-glance view says Obama has been relying on the familiar combination of carrots and sticks: carrots for Iran, in the form of dialogue, respect and personal video messages bursting with praise for Iranian civilisation; and sticks for Israel, sharpened into explicit, no-wriggle-room demands to end ­settlement building on the West Bank. In this view, Obama should conclude that carrots don't work but sticks do – the latter prodding Binyamin Netanyahu to utter, at long last, the words "Palestinian state", even if the phrase emerged from his mouth, as one Israeli commentator put it, like a rotten tooth pulled without anaesthesia. He put the squeeze on Bibi and got results, he made nice to Tehran and got nothing. Time to draw the obvious conclusion.

But it might not be quite as simple as that. Start with Iran. It's true that the Obama administration had hoped that its policy of engagement – after the outer darkness treatment of the Bush years – would bring change. If the election results were legitimate, it would mean the Iranian people had heard Obama's honeyed rhetoric and were unmoved. That is not totally ludicrous: two US non-profit organisations ran an extensive, scientific opinion poll in Iran last month and did indeed find Ahmadinejad walloping his opponents.

But what if there was fraud? It certainly seems likely, given the freakish nature of some of the numbers, complete with Ahmadinejad outpolling his rivals even in their own home towns. If he, and the hardline clerical authorities whom he serves as frontman, did indeed steal the election, that confirms the nature of the regime Obama confronts. It also exposes the US president to the charge, already voiced on the right, that he was naive to think he could engage meaningfully with what is nothing more than a theocratic dictatorship.

The US administration has its ­counter-arguments ready. For one thing, the policy of dialogue was conceived on the assumption that Ahmadinejad would be a two-term president. True, one senior administration official confessed to me today, some in the White House began to believe they were about "to catch a break" in Iran as they saw the excitement the opposition Mousavi campaign was generating: they dared to hope they were about to see a repeat of this month's Lebanese elections in which the pro-western coalition defeated Hezbollah and its allies. But that feeling did not last long.

Nor are Washington's policymakers feeling queasy about dialogue with a nation that lays on an outward show of democracy – complete with rallies and debates – only to crush dissent brutally when the people vote the wrong way. Such scruples have not prevented the US dealing with China, Russia, Saudi Arabia or a long list of others. As Obama explained repeatedly through the 2008 campaign, he does not believe diplomacy is a reward for good behaviour, but a tool to advance America's self-interest.

But it's not one Washington will deploy indefinitely. "We'll see if it bears fruit," says that official. "If it doesn't then, at some point, we'll have to try something else. It's not without limit." When might US patience run out? The answer is the end of this year: after that, western diplomats believe Tehran will reach the nuclear point of no return, when no one will be able to prevent it acquiring the bomb.

In this context, Team Obama can even spot an upside to Ahmadinejad's re-election. First, there's a Nixon-to-China calculation that says Iran's supreme leader, Ali Khamenei, would only feel confident enough to reach an accommodation on nukes if he was secure at home: he couldn't afford a reformist president vulnerable to accusations of treachery from the right. Second, Tehran might feel the need to offset the charge of election fraud with a reputation-redeeming gesture, softening the nuclear line. Should that not come, and Obama decides to replace diplomacy with something stronger, his chances of marshalling an international coalition will have been boosted: Washington expects to hear fewer arguments defending Iran's nuclear quest as the legitimate interest of a legitimate government.

All of which adds up to a ­conclusion that it is far too early to declare the Obama outreach to Iran a failure. The policy will continue for another six months, if only so that, should Iran eventually show Washington the finger, Obama can say what Bush never could: that he tried to do it the nice way.

What of Netanyahu? Here too nothing is quite as simple as it looks. Yes, the stick brought success, in that Bibi is now technically committed to a two-state ­solution. But the promise came laden with caveats and qualifiers: such a state must be demilitarised, with no control over its own airspace and foreign ­alliances, and will come about only if Palestinians first recognise Israel as the state of the Jewish people. All this was offered with no empathy for the Palestinians, none of the language deployed when Ariel Sharon and Ehud Olmert made their own reversals on Palestinian statehood – speeches that conveyed the sense of men who had made a difficult journey towards recognition of the other. Netanyahu's was grudging, the words of a man doing the minimum necessary to get a demanding US president off his back.

"The Americans see through that ruse," says the US-based analyst Daniel Levy, who does not expect Obama to ease the pressure on settlements just because Bibi has dared speak of a two-state solution. But there are opportunities here, too. Netanyahu lodged his objections to a Palestinian state solely in terms of Israeli security. Obama could respond to that, says Levy, by offering whatever Israel needs to allay its fears – even a Nato-led protection force, if that's what it takes. Netanyahu has framed the conflict in such a way as to give serious leverage to Obama.

This dramatic June weekend has set a test of the American president's resolve. Will he stick to his course, continuing to reach out to Iran even as he shows tough love to Israel? He should, partly to show that his policy was always about long-term strategy rather than short-term tactics. But also because the last 48 hours offer plenty of evidence that he's getting it right.