The American people are celebrating history. Barack Obama has just been sworn in as the 44th President of the United States and is the first African-American to sit in the Oval Office. It was a true demonstration of democracy at work, underlining the peaceful transition of power in the most powerful country on the planet.

Students of US history, never mind Americans themselves, will appreciate the event much more than others. Historic moments are subjective in nature. The American people will have to excuse the majority of Arabs, and Muslims for that matter, for not going out of their way to mark Obama's inauguration.

This indeed could be the beginning of a new chapter in American history, but for the Middle East to subscribe to such a notion, it will have to witness the unravelling of a miracle rather than the unfolding of a historic event in Washington.

But this is not to say that the people in this region - Arabs and Israelis, Muslims, Christians and Jews - are not building high hopes for the new administration.

Obama enters the political stage at a precipitous juncture; the global economy is stagnant and the embers of conflict and war are burning in the Middle East. Obama has promised change, for the better, and Americans have embraced that promise - so have millions around the world.

The Middle East poses the greatest foreign policy challenge to the young president. The chaos and destruction that his predecessor has left behind in the past eight years has been colossal. To turn things around Obama needs a miracle, a handful of them.

Early signs have been positive. By ordering the closure of Guantanamo Bay detention facility, the President was removing a stain that has blemished America's image and challenged its values. And by appointing two distinguished diplomats as special envoys to the Middle East, and to Afghanistan and Pakistan, respectively, he was announcing his administration's determination to follow a different path from that of George W. Bush.

But these are symbolic steps. They are neither historic nor miraculous. The extent of damage that America has incurred upon the people of this region and to their future well-being has been extravagant. Fixing problems will require resolute leadership, something that Obama is yet to demonstrate.

He may succumb to pressure, to the influence of power centres in Washington and to political calculations that even now are gearing up to the 2012 re-election efforts. After all, no matter what colour is the US president, he will want to survive in Washington, serve his party's best interest and secure a second term.

But Obama could still play Washington's game and chart a new US foreign policy that addresses the decades-old grievances of the Palestinian people, end occupation and usher in a new era of US-Muslim reconciliation. That is a tough call. It is also a historic one, almost miraculous.

Successive US administrations have failed to tackle the core of Middle Eastern instability. Some came close, others only helped radicalise the region and deliver it to extremists and their agenda of hate. But in spite of all of the carnage and destruction, the majority of Arabs still want peace. They want their children to have a better future, and they want to see policies of hope and reconstruction replacing calls of despair and destruction. They want to regenerate their beliefs in peace, justice and common prosperity.

Few days before Obama's inauguration party, Israel wrapped up a barbaric aggression against the helpless residents of Gaza. Israel's war orgy claimed the lives of over 1,300 people, the majority of whom were children and women.

A staggering 5,000 wounded Palestinians remain in hospital. Over 20,000 homes were demolished and more than 50,000 people have been made homeless, yet again as a result of Israel's 40-year occupation.

International organisations, the UN among them, are calling for investigations of war crimes in Gaza.

This is a moral calling on the Obama promise. It is not an issue of Hamas and its bellicose policies, but a legal warrant to address the plight of the Palestinians.

The extent of the Palestinian tragedy goes beyond the Gaza massacre. The root cause is occupation which has ripped apart the West Bank and destroyed any meaningful settlement to this conflict. It is in the Holy Land where historic moments are needed. It is there that a miracle has been due for such a long time. It is in Palestine that Obama can implement change and carry out his promise.

So while Americans celebrate history in the making, while they ponder their future under a black and charismatic leader, and while the rest of the world extends its salutations for a remarkable event and a renewed promise, we wait anxiously.

It is a complicated region that Obama and his team will have to deal with. Iraq, Iran, Afghanistan and Pakistan are all complex and challenging issues.

There are no easy solutions and at times the US will have to accept a less than favourable compromise. The rift between America and the Muslim world will not be mended in one or four years. It could take many years, even decades.

But Palestine offers an opportunity for the US to do something and open a new page; launch a new era. The Arab-Israeli conflict is the root of regional crises. This is where Obama must start and this is where he must make a difference. This is where he can make history.