There are signs of hope trickling in from Gaza. Some say this rump state may have the world's fastest growing economy (though its base point was not very high). There are signs that Fatah and Hamas may agree to an Egyptian proposal aimed at reconciliation between the two groups. Palestinian leaders backed away from seeking war crimes charges in the United Nations against Israel (under American pressure, no doubt). And the release of Palestinian prisoners in exchange for video footage of captured Israeli soldier Gilad Shalit, whose 2006 capture helped spark war in the region, is a positive sign.
These baby steps are not insignificant. The peace process there is still the elephant in the room, wherever Arab diplomats meet to discuss what to do about Israel, Iran, and other vexing issues. The settlement debate has received the most attention, and Israel's apparent thumbing of its nose at the Obama administration, but there is real progress being made on other fronts.
Obama has backed away from calls for a settlement "freeze" (and instead called for "restraint"). That is an unwelcome sign. Yet while Netanyahu government is trying to create a new set of facts on the ground, from which to work from when all the parties hammer out peace, the bigger threat is that Afghanistan will suck up all of Obama's time, attention, and energy and the Middle East peace process will get shelved. The other thing to watch is that whenever progress is made in the region and peace appears on the (admittedly distant) horizon, a spoiler will appear who is intent on wrecking the process.