The Obama administration's job of promoting Arab-Israeli peace may have just gotten harder.
The U.S. lost a key player when former Egyptian President Hosni Mubarak was forced out of office. And Palestinians are still reeling from leaked documents that put everyone in a bad light.
Some experts say it is time for a totally new approach.
President Obama seems to be trying to look on the bright side. Protesters in Egypt were driven mainly by anger against their authorities rather than against the U.S. or Israel.
"When you have the kinds of young people who were in Tahrir Square, feeling that they have hope and they have opportunity, then they're less likely to channel all their frustrations into anti-Israel sentiment or anti-Western sentiment, because they see the prospect of building their own country," Obama said.
But he also acknowledges that the U.S. is facing a more challenging environment — because with democracies come a wider variety of views at the negotiating tables.
Diana Buttu, a former adviser to Palestinian negotiators, says the mood on the street in the Palestinian West Bank has changed dramatically because of Egypt.
"There's definitely a sense that the Arab world is now much more empowered and emboldened to confront oppressors and to take on U.S. foreign policy, to take on Israel. It's definitely viewed as a game-changer here," she says.
Buttu, now a research fellow at Harvard's Kennedy School of Government, says U.S. mediators in past peace talks always took into account Israeli public opinion, but not the Palestinians'.
"For example, they would say, 'We can't halt settlement activity now because Israeli public opinion won't take it.' And there was never the equivalent sense of doing the same for Palestinians and for Palestine," she says.
That, she argues, will now have to change.
Daniel Levy, a former Israeli negotiator, says the Obama administration may need some time to adjust to this new reality.
"It's difficult to be a friend of Arab democracy if you are perceived to be an enemy of Palestinian freedom," he says.
Levy, of the New America Foundation, says that to change this perception, the U.S. has to do more to end the Israeli occupation and stop — as he put it — indulging Israel. At the moment, though, U.S. diplomats are continuing their efforts to prevent a vote on a U.N. Security Council resolution that would condemn Israeli settlement building in the occupied West Bank. And State Department spokesman P.J. Crowley has given no indication that the U.S. is rethinking its strategy.
"We'll continue to engage both the Israelis and the Palestinians," he says. "But obviously, everyone is still absorbing what has happened, what the impact is on the process."
It can't be business as usual, says Levy. The U.S., he says, can no longer rely on Egypt to back talks that were going nowhere, or to continue sealing off Gaza — the territory controlled by the Palestinian militant group Hamas. Levy says Egypt and Israel will have to find new ways to keep weapons out of Gaza without punishing Palestinians. He says this may be a chance to build on what he calls a "pyramid peace."
"Until now, it was only the very tips of the two pyramids that had anything to do with each other on a very narrow, often security-interest related basis," Levy says. "A democratic Egypt and a democratic Israel could have a much broader peace. You could get the bases of those two pyramids into the peace. But only if you can also do right by the Palestinians."
He calls this a new era for U.S. peacemakers — an era when public opinion in the Arab world matters.