By Laura Rozen

When Palestinian Authority President Mahmoud Abbas, holding aloft his nation's United Nations application bid, finished his rousing speech to the U.N. General Assembly last Friday, only two diplomatic delegations in the world body were left sitting looking glum and dejected amid the thunderous applause and standing ovation: those of the United States and Israel.

American officials portrayed a subsequent Quartet statement calling for new peace talks as vindication. But for some observers, the bruising week for the United States at the United Nations and the sense of American international isolation in opposing upgraded Palestinian status had the feeling of a decisive turning point--the foreign policy equivalent of the S&P's downgrading of  the federal government's credit rating, after the vicious Congressional fight last month over raising the debt ceiling.

President Barack Obama has never had so many domestic political constraints on his foreign policy leadership. He is struggling with a protracted economic crisis and an unemployment rate over 9 percent, blocked by the Republican Congress on spending resolutions month by month, and facing criticism of his pro-Israel credentials from Republican presidential candidates, all while serving as president of a nation still involved in two wars, and while simultaneously running in his 2012 presidential reelection campaign,

Obama's notably sober speech last week to the United Nations--where he has been a figure of immense international fascination--amplified the sense that his administration is, if not exhausted, in the middle of a long, hard slog. "Peace is hard," Obama told the world body. "Progress can be reversed. Prosperity comes slowly. Societies can split apart. ... And we have more work to do."

"In talking to diplomats who participated in the discussions about Israel and Palestine and other issues, I think it is clear that they think the U.S. is in a weakened position when it comes to leadership," said David Rothkopf, a former Clinton administration official and Foreign Policy magazine contributor, in an interview Monday with The Envoy.

Rothkopf attributed the perception of diminished American leadership to several issues. "The U.S. is consumed with its own problems," he said, describing the perceptions that various foreign diplomats have relayed to him in recent days. "Obama has entered campaign mode and is not engaging on international issues in as serious a way. There is some division, even dysfunction to the [U.S.] administration's [foreign policy] team."

Finally, Rothkopf said, some of his diplomatic contacts have concluded that Obama himself is "not a leader. ... he's defensive. ... Obama is [perceived to be] boxed in politically at home."

The management of the vexing Israeli-Palestinian peace process--which Washington has led on and off for the past two decades--is a key barometer by which foreign leaders and populations evaluate American effectiveness and strength. And to the detriment of Obama's global leadership, "the peace process is broken," Rothkopf said. "It is not producing results. And the result is that the U.S. is put in the perverse position of defending the status quo--which is the only place it feels it has leverage left--at least in the minds of the administration."

"At the end of the day, the Palestinians have a huge amount of leverage," Rothkopf said. "They are clearly the ones who were playing offense, while everybody else was" playing defense.

Other Obama administration allies in the foreign policy community say that while there's no doubt that American power is retracting due to the economic crisis and other issues, it's a bit overblown to assess the drama at the United Nations last week as a decisive turning point.

"Obama had to go to New York and say, [in effect], 'Look, despite our incredibly dysfunctional politics, we still are a nation the world can't move forward without,'" said Heather Hurlburt, a former Clinton administration official who heads the progressive National Security Network, in an interview Monday with The Envoy. "He gave it his best shot. But until our whole political establishment decides that it matters," it's hard for Obama to expend the political capital on midwifing the peace process, she said.

"I think you could argue that the U.S. had two big victories at the U.N.: it got the international community to step up on Libya, and it was able to avert a showdown on Palestine," Jon Alterman, a Middle East expert at the Center for Strategic and International Studies, told The Envoy. "If you asked them a week ago what were your goals [for the UN], they would argue the goals were achieved."

Still, Alterman conceded, "there's no question that our domestic politics affect our foreign policy."

"Partly that has to do with perceptions of the president," he said. "More fundamentally it has to do with the sense that the United States is a wavering actor in the world. That its financial resources are unclear; military commitments are uncertain. And that its ability to accomplish its goals after both [the wars in] Iraq and Afghanistan is in doubt. But it didn't get that way overnight."

"The reality is that we knew for some time that the U.S. is not able to solve this [Middle East peace] issue by itself," a European official told The Envoy last week, on condition of anonymity to discuss a sensitive diplomatic matter. "There are  constraints in the region and it makes it very difficult even for the U.S. president whose first phone call [after his inauguration] was with Abbas to achieve such influence. It is not his fault. The dynamics of the region are very difficult."

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