The election of Mr Ehud Barak and the defeat of Mr Benjamin Netanyahu have been greeted with delight by the Clinton administration as a boost for the stalled peace process.
The administration sees the outcome as the best thing to have happened the process for over three years. The White House's open support for the outgoing Labour leader Mr Shimon Peres in the 1996 general election soured relations with the incoming Likud leader.
President Clinton was especially angry with Mr Netanyahu over his failure to implement the Wye River accord with the Palestinian leader, Mr Yasser Arafat, which was so painfully put together with US prodding last October.
Mr Clinton and King Abdullah of Jordan, who is visiting Washington, yesterday hailed the election of Mr Barak. Mr Clinton, after congratulating Mr Barak on Monday, said he would "work energetically for a just, lasting and comprehensive peace that strengthens Israel's security".
The US now hopes that under Mr Barak, Israel will implement the handover of a further 13 per cent of West Bank territory to the Palestinian Authority as laid down in the Wye River agreement. Following the establishment of the new government, the US is expected to convoke a new round of talks to deal with the outstanding issues of the final status of Jerusalem and Palestinian statehood.
Last month, Mr Clinton successfully urged Mr Arafat not to declare unilaterally a Palestinian state on May 4th, the date laid down in the Oslo accords, but in return the US President promised to try and have the final negotiations concluded within a year. The US hopes the settlement will encompass an Israeli withdrawal from south Lebanon and a peace agreement with Syria.
The British Foreign Secretary, Mr Robin Cook, yesterday urged Mr Barak to halt the building of new settlements in the occupied territories.