WASHINGTON is still reeling from two strategic defeats this week in its regional showdown with arch-foe Iran, and several key policy-makers have claimed the hardest blow came from staunch ally Israel.
The Jewish state's decision on Wednesday to restart peace talks with Syria came at a particularly difficult time for the Bush administration. It followed a decision by Lebanese leaders hours earlier to cede veto power to the Iranian-backed Opposition, consolidating the rising influence of the radical regime and its key partner, Damascus.
Both hardline nations emerged emboldened by the two moves, while the US saw them as a slap in the face, a senior US official was quoted as saying in The New York Times.
The Israeli decision to re-engage Syria exposes a significant strategic division between Jerusalem and Washington, both of which rarely diverge on Middle Eastern policy.
The announcement of indirect talks between Syria and Iran, to be brokered by Turkey, did not come as a surprise to Washington, which had been briefed on contacts between the two sides over the past two years.
However, the forewarning did not mitigate the shock of the decision being made at such a pivotal point in the showdown between the hawkish Bush White House and the equally hardnosed leadership of Iranian President, Mahmoud Ahmadinejad.
Mr Bush had invested much of the remainder of his foreign policy political capital in a peace track with the Palestinians - one he personally tried to rejuvenate last November. Discussions between the three sides have, at best, inched along throughout the year and have been marred by a mutual reluctance to usher in trust-building measures.
As talks with the Palestinians continued to falter, Israel increasingly felt there was a better chance of reaching an agreement with Syria.
Prime Minister Ehud Olmert's office also believes there is a much better chance of any deal signed with the Syrians being implemented because the issues to be discussed relate mainly to territory.
The Palestinian peace track is a tangle of more complex issues, which involves moving hundreds of thousands of Israelis and Palestinians and dispersing billions of dollars in compensation as part of a final-status settlement.
Syria has long been a key player in Palestinian politics. Current President Bashar al-Assad and his late father Hafez al-Assad, who ruled the totalitarian state for more than 30 years until his death in 2001, have backed several outlawed groups, including Hamas, as well as sheltering their leaders.
But Mr Assad Jr's strong alliance with Iran since the turn of the century, and particularly since the election of Mr Ahmadinejad in late 2005, has put Washington on almost a cold war footing with both Syria and Iran.
Mr Bush has disavowed any high-level contact with either country for the past three years, claiming both have eagerly fuelled the insurgency in Iraq, which has US forces pinned down five years after the 2003 invasion.
The White House also accuses the two allies of attempting to gain control of Lebanon, a goal that was advanced on Wednesday when the US-backed Government of Fouad Siniora capitulated to Opposition demands.
While in Jerusalem for Israel's 60th anniversary just over a week ago, Mr Bush used a speech in the Israeli parliament to warn against appeasing regional strongmen and those prepared to use force for political gain.
"He isn't home a week and the dictators and forces of violence have triumphed," said former US national security official Bruce Reidel, quoted in a US newspaper.
Israel says the key reason for kick-starting talks with Syria is to try to peel it away from its links to Iran. This is also a main aim of Mr Bush.
However, the US has doggedly stuck to a policy of punishing Damascus by isolating it economically and attempting to force it to the negotiating table by attrition.
Israel had previously marched arm-in-arm with the US on its approach to Syria, and continues to enforce a hardline stance against two of Syria's key patrons, Hezbollah and Hamas.
However, Mr Olmert's office said it had received a missive from Damascus within the past fortnight, which convinced it that such a dramatic divergence from the US was a worthy gamble.
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