Never has US President George W. Bush been in greater need of political courage. Only resolute and radical action by the United States can avert a catastrophe in the Middle East, which will not spare the Americans itself. US policies have set the region on fire. Changing course may be the only way to extinguish the flames.

Iraq is in the grip of a savage, if still undeclared, civil war. A defiant Iran, the main beneficiary of the regional chaos, is insisting on pursuing its nuclear programme. Afghanistan, threatened by a resurgent Taliban and the ravages of the opium trade, is teetering on the edge of an abyss.

In Pakistan, President Pervez Musharraf is walking a dangerous tightrope between an aggressively intrusive America, blindly waging its "war on terror", and militant Islamic opponents, eager to bring him down.

Israel had imagined that smashing Iraq would usher in an era of unchallenged US-Israeli regional hegemony, but it is now beginning to regret its enthusiastic support for the toppling of Saddam Hussain. Instead, the war has demonstrated the limits of American power and awakened uncontrollable forces of Muslim rage.

Claiming that it now needs more "strategic depth", Israel is planning to seize more than a quarter of the West Bank. But this is a recipe for renewed violence as it reduces any future Palestinian state to a cluster of helpless and isolated cantons. No Palestinian leader could accept such an outcome, still less a Hamas-led government.

Rightly or wrongly, the US is blamed for this catalogue of disasters. Never has it been so distrusted and detested at the popular level throughout the Middle East. Meanwhile, Al Qaida waits to strike again.

Although the regional outlook has rarely seemed more gloomy, Iraq and the Israeli-Palestinian conflict could, nevertheless, provide Bush with an opportunity to rescue his presidency, and his place in history, but only if he has the courage to correct his aim.

Having released sectarian demons in Iraq, the US has no further place in that benighted country. It must recognise its mistake and declare a timetable for the early withdrawal of its troops.

The problem of Iraq should be handed over to Iraq's neighbours Iran, Turkey and the Arab countries who, once the US is out of the way, would be well placed, acting in concert, to arrange a truce between the warring factions. It is very much in their interest to do so, before violence engulfs them too.

If a truce were agreed, and some degree of calm restored, it might then be possible to form a government of national unity, with the urgent task of putting the shattered country together again.

Reconstruction funds would be needed from the US, from Europe, from China and Japan and, of course, from the Gulf countries, but the Iraqis must be left to resolve their differences free from the presence of foreign troops.

The situation in the Palestinian territories also requires immediate American attention. Indeed, an Arab-Israeli agreement may be the only way to roll back support for terrorism throughout the region and go some way to restore America's battered reputation.

Three main reasons

The opportunity is there. Public opinion polls in both Israel and the Palestinian territories suggest that some 70 per cent of the population want a two-state solution to the conflict.

Why then has a deal not already been struck? Possibly for three main reasons: the balance of power is weighted overwhelmingly in Israel's favour; there is wide disagreement on where Israel's final borders should be drawn; and extremists in both camps are quick to blow up any deal which does not meet their demands.

The history of the conflict shows that Israelis and Palestinians cannot reach a settlement on their own. They need a firm helping hand which the US alone can provide.

Bush now has a chance to redeem American failures in the peace process over the past 15 years, The Quartet consisting of the US, Russia, the European Union and the UN has failed to broker a settlement, largely because it never spelled out what a final settlement would look like. It proposed a Road Map but no clear destination.

As a result, the Road Map was ignored by both sides. Israel continued expanding its colonies and building its separation wall deep inside Palestinian territory, while the Palestinian Authority, in turn, failed to disband the radical militias, as it was meant to do.

The US must now state clearly how it sees the shape of a final settlement. The time for fudge and ambiguity is past. It should insist on direct negotiations between Israel and the Palestinians under international supervision. In order to give the talks a chance of success, the US must immediately halt Israel's attempt both to cut East Jerusalem off from its Palestinian hinterland and to separate Gaza from the West Bank.

The Palestinians, in turn, must create the conditions for a negotiated settlement by forming a national unity government of Hamas, Fatah and other factions on the basis of a common political programme; by reaffirming their commitment to non-violence on the basis of a long-term truce; by merging all militias into a single security force; and by forcibly disbanding such rebellious groups as Islamic Jihad and the Al-Aqsa Brigades.

The US holds the key. It must choose between the vain attempt to isolate and defeat Hamas or, on the contrary, seek to come to terms with the new actors in the region. Hamas has powerful allies in Iran, in Syria, in the international movement of the Muslim Brothers, and in Arab public opinion. These are the forces with which America needs to engage, if only for its own security.

Patrick Seale is a commentator and author of several books on Middle East affairs.