With Holbrooke picked as envoy for South Asia and Ross for Iran-related issues, people are asking why Clinton is finding it more difficult to make a choice for the Arab-Israeli peace issues slot. I am told that she faces a dilemma that is more tactical than ideological. Obama's words during the campaign generated high espectations in the region that there will be a high level effort led by the president to find a solution, especially on the Palestinian front. The escalation in Gaza raises the stakes further. But the situation on the ground is not promising for peace negotiations, with Hamas in control of Gaza and Fatah barely able to control the West Bank. A majority in Israel believes that further withdrawals would lead to more rocket attacks, this time from the West Bank adjacent to the Israeli heartland. Netanyahu is likely to be elected Prime Minister on February 12, three weeks after Obama takes office. The situation looks anything but ripe for a diplomatic breakthrough.

Clinton is torn between making a high level political appointment of a prominent public official, like George Mitchell, who might report to the president, or a professional reporting to her, a counterpart to Dennis Ross or Bill Burns. If she appoints at the high level, unrealistic expectations may be further inflated and the issue could spin out of control. But if she appoints at the professional level, it may be described as disappointing, less than Obama led the region and the world to expect. Clinton is proceeding very carefully on this one.