Washington  - President-elect Barack Obama's early handling of the conflict in the Gaza Strip will serve as his first opportunity to set a fresh tone for US foreign policy in the Middle East.

Unless Egyptian brokered negotations - which are progressing - produce a ceasefire by the time Obama takes office on Tuesday, he will inherit more than three weeks of fighting between Israel and Hamas militants in a conflict that has threatened to undo the already shaky peace process.

"People will be looking to see what he does in Gaza," said Stephen Grand, an analyst at the Brookings Institution's Saban Centre for Middle East Policy.

Obama could use the crisis in Gaza to establish his longer-term approach to the broader Israeli-Palestinian conflict and the region as a whole. But the newcomer will have to convince the Palestinians and Arab states that he can effectively mediate in the peace process, overcoming perceptions that his predecessor, President George W Bush, was too close to Israel, Grand said.

Obama will need to be "a president who is going to be an honest broker and energetic in trying to find a solution to the conflict," Grand said.

With the US economy in it's worst shape in decades and a campaign promise of ending the war in Iraq to fulfil, it remains to be seen how quickly Obama will leap into the Gaza crisis or the broader peace process.

"The problem for Obama is the domestic economic situation is so severe that his ability to exert much attention to anything overseas is going to be limited," said Graeme Bannerman, a former State Department official for Mideast policy and now an analyst at the Middle East Institute in Washington.

In the short run, Obama will likely ask his designated secretary of state, Hillary Clinton, to take the lead in cleaning up the aftermath of Gaza and restoring the peace process.

"Working toward a durable ceasefire is going to be an initial challenge if it's not achieved by the time that the president-elect takes office," Clinton said this week.

During her US Senate confirmation hearing, she described the challenge: "How do we begin to rebuild some sense of cooperation and, dare I say, even trust and confidence-building measures so that we can get back to this work of the slow but steady building of the capacity of the Palestinian Authority?"

How Obama responds to the crisis in Gaza will spill over into other regional issues, and he will need to foment a spirit of cooperation with the countries in the region to promote a better understanding, like partnering on education, science and technology to move beyond Bush's often unilateral approach, Grand said.

"You need to signal that there is a new era in American foreign policy that will be a different, values-based foreign policy rooted in international law and partnership, not confrontation," he said.

Obama could send the right message by quickly endorsing an immediate Gaza ceasefire, both Grand and Bannerman agreed. Both analysts speculated that Israel might cease hostilities before Obama takes office to avoid a potential disagreement with the new president of the Jewish state's strongest ally.

"My guess is the Israelis are trying to finish this as quickly as possible," Bannerman said. "I don't think they want to have this situation on the front burners when Obama becomes president."

Grand said the Israelis would probably prefer to avoid placing Obama in an awkward position to start his administration, but will have to balance that tactic with their goal of degrading Hamas' capacity to fire rockets at Israeli cities.

"It's hard to imagine that they would want to put Obama in a situation where hostilities are going on into his term, and he'd be pressured to take a very strident stance," Grand said. "That said, there are clear objectives that the Israelis had going in." (dpa)