According to media reports, Obama's plan will require Israel to withdraw its citizens and its military to the indefensible 1949 armistice lines. It will provide for the free immigration of millions of Israel-hating Arabs to the Palestinian state. And it seeks to represent all of this as in accord with Israel's interests by claiming that after Israel renders itself indefensible, all 57 members of the Organization of the Islamic Conference (including Iran) will "normalize" their relations with Israel. In short, Obama is using his peace plan to castigate the Netanyahu government as the chief destabilizing force in the region.

During his meeting with Obama, Netanyahu succeeded in evading the policy traps Obama set for him. Netanyahu reserved Israel's right to act independently against Iran and he conceded nothing substantive on the Palestinian issue.

While itself no small achievement, Netanyahu's successful deflection of Obama's provocations is not a sustainable strategy. Already on Tuesday the administration began coercing Israel to toe its line on Iran and the Palestinians by engaging it in joint "working groups."

Then, too, the government's destruction of an outpost community in Judea on Thursday was perceived as Israeli buckling to US pressure. And it doubtlessly raised expectations for further expulsions in the near future.

SO WHAT must Netanyahu do? What would a strategy to contain the Obama administration's pressure and maintain international attention on Iran look like?

Under the present circumstances, the Netanyahu government's best bet is to introduce its own peace plan to mitigate the impact of Obama's plan. To blunt the impact of Obama's speech in Cairo, Netanyahu should present his peace plan before June 4.

Such a plan should contain three stages. First, in light of the Arab world's apparent willingness to engage with Israel, Netanyahu should call for the opening of direct talks between Israel and the Arab League, or between Israel and the Organization of the Islamic Conference, regarding the immediate normalization of relations between Israel and the Arab-Islamic world. Both Obama and Jordan's King Abdullah claim that such normalization is in the offing. Israel should insist that it begin without delay.

This, of course, is necessary for peace to emerge with the Palestinians. As we saw at Camp David in 2000, the only way that Palestinian leaders will feel comfortable making peace with Israel is if the Arab world first demonstrates its acceptance of the Jewish state as a permanent feature on the Middle East's landscape. Claims that such an Israeli demand is a mere tactic to buy time can be easily brushed off. Given Jordanian and American claims that the Arab world is willing to accept Israel, once negotiations begin, this stage could be completed in a matter of months.

The second stage of the Israeli peace plan would involve Israel and the Arab world agreeing and beginning to implement a joint program for combating terrorism. This program would involve destroying terror networks, cutting off funding for terror networks and agreeing to arrest terrorists and extradite them to The Hague or the US for trial. It should be abundantly clear to all governments in the region that there can be no long-term regional peace or stability as long as terrorists bent on destroying Israel and overthrowing moderate Arab regimes are allowed to operate. So making the implementation of such a join program a precondition for further progress shouldn't pose an obstacle to peace. Indeed, there is no reason for it to even be perceived as particularly controversial.

The final stage of the Israeli peace plan should be the negotiation of a final-status accord with the Palestinians. Only after the Arab world has accepted Israel, and only after it has agreed to join Israel in achieving the common goal of a terror-free Middle East, can there be any chance that the Palestinians will feel comfortable and free to peacefully coexist with Israel. And Israel, of course, will feel much more confident about living at peace with the Palestinians after the Arab world demonstrates its good faith and friendship to the Jewish state and its people.

Were Netanyahu to offer this plan in the next two weeks, he would be able to elude Obama's trap on June 4 by proposing to discuss both plans with the Arab League. In so doing, he would be able to continue to make the case that Iran is the gravest danger to the region without being demonized as a destabilizing force and an enemy of peace.

Whether Netanyahu advances such a peace plan or not, what became obvious this week is that his greatest challenges in office will be to prevent Iran from acquiring nuclear weapons while preventing the Obama administration from blaming Israel for the absence of peace.