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• President unveils shift in American policy towards Arab nations • ‘Status quo not sustainable,’ he warns region’s autocracies • Sets out two-state solution to Israel-Palestine conflict • Tells Syria’s al-Assad to lead transition or ‘get out of way’ President Barack Obama has sought to realign US policy on the Middle East, promising to shift from the long-held American backing for autocratic regimes to support for the pro-democracy movements and to set out the shape of an Israeli-Palestinian peace deal. “The status quo is not sustainable,” Obama said in a major speech at the state department in Washington on Thursday, the first on the Middle East since he spoke in Cairo in 2009. In a speech dubbed Cairo Two, he threw US weight behind the protesters, saying: “We face a historic opportunity. We have embraced the chance to show that America values the dignity of the street vendor in Tunisia more than the raw power of the dictator … After decades of accepting the world as it is in the region, we have a chance to pursue the world as it should be.” He was addressing criticism that America has been behind the curve in response to the pro-democracy movements sweeping the region. As well as support for the newly emerging democracies in Egypt and Tunisia, he criticised long-term US allies such as Bahrain, where America has a huge naval base, for its suppression of democracy movements. The US had been criticised as inconsistent in issuing only a mild rebuke to Bahrain. But Obama said: “We have insisted publicly and privately that mass arrests and brute force are at odds with the universal rights of Bahrain’s citizens, and will not make legitimate calls for reform go away.” He also addressed what he has previously said was one of the main sources of Middle East antagonism towards the west, the Israeli-Palestinian conflict. He set out the parameters of a deal and called on Israel to act boldly. It comes at a time when there is stalemate in the Israeli-Palestinian peace process. Although the US has long recognised that the boundaries of a Palestinian state should be based on those that existed before the 1967 Arab-Israeli war, it was a significant shift for Obama to stress this in his speech. “The United States believes that negotiations should result in two states, with permanent Palestinian borders with Israel, Jordan, and Egypt, and permanent Israeli borders with Palestine. The borders of Israel and Palestine should be based on the 1967 lines, with mutually agreed swaps, so that secure and recognised borders are established for both states,” he said. Although he prefaced this by saying that Israel’s security remained a core US aim in the Middle East, it marks a move towards the Palestinians. Obama is due to see the Israeli prime minister, Binyamin Netanyahu, in Washington on Friday. “As for Israel, our friendship is rooted deeply in a shared history and shared values,” Obama said. “Our commitment to Israel’s security is unshakeable. And we will stand against attempts to single it out for criticism in international forums. But precisely because of our friendship, it is important that we tell the truth: the status quo is unsustainable, and Israel too must act boldly to advance a lasting peace.” He stopped short of calling for the Syrian leader, Bashar al-Assad, to step down from office but told him he had a choice. “The Syrian people have shown their courage in demanding a transition to democracy. President Assad now has a choice: he can lead that transition or get out of the way,” Obama said. The speech made no mention of other autocracies such as Saudi Arabia, on which America depends for oil. He said that Osama Bin Laden’s death had changed the dynamic in the Middle East. “Bin Laden was no martyr,” Obama said. “He was a mass murderer who offered a message of hate – an insistence that Muslims had to take up arms against the west, and that violence against men, women and children was the only path to change. He rejected democracy and individual rights for Muslims in favour of violent extremism.” It is the most important speech he has made on the Middle East since one in Cairo in June 2009, in which he called for a new beginning in relations between the US and the Muslim world after a decade dominated by 9/11 and the Iraq war. He focused then on a need for an Israeli-Palestinian peace, a deal in which Iran would give up any nuclear weapons ambitions, and ways to neutralise extremism. He also promised to close Guantanamo. Obama’s speech comes after intensive debate within the White House between those arguing that the US should be at the forefront of the democracy movement and those whose concern is US national security and protection of oil supplies. The few billion dollars proposed so far is not comparable to the vast sums the US sent to Europe after 1945, and some of it has already been announced by the World Bank and the IMF. The speech was aimed at a global audience, with the state department providing simultaneous translation into Arabic and Farsi, and was deliberately timed for midday in Washington so that it could be watched live in the evening in the Middle East. The White House view is that the best way to support democracy is through economic reform, and drew comparisons with the massive injection of American aid to Europe after the war, and with the support given to central and eastern Europe in 1989. The US is to relieve Egypt of up to $1bn in debt and lend or guarantee up to $1bn. The World Bank, the IMF and other multilateral institutions are to provide a further $2bn-3bn. The White House sees the investment as essential to help deal with problems such as unemployment in Egypt, where a majority of the population is under 30 and youth unemployment is estimated at 30%. The problem for Obama domestically is that Americans may look at the high unemployment rates in the US, officially around 9%, though the real figure may be double that, and question why billions are being sent overseas. Arab and Middle East unrest Barack Obama Middle East United States Ewen MacAskill guardian.co.uk