The world will be enveloped in a heavy cloud of gloom and doom this year. Economies will sputter, governments will fall, and companies will fail. But the biggest danger of all is a sense of hopelessness. Preventing this requires resolving some large and apparently intractable problem. Closing the Doha Round of world trade talks provides one such opportunity. But an even better opportunity is provided by the Israel-Palestine conflict.

Many people around the world, especially in the West, have convinced themselves that this conflict is beyond resolution. Several efforts have been made since the famous Oslo accords of 1993. All failed. But few have noticed that an unusual constellation of forces has emerged, opening a remarkable new window of opportunity for a solution. Such geopolitical opportunities are rare, and it would be a great tragedy not to seize this one.

For a start, there seems to be a near-universal consensus that any solution will be based on the Taba accords worked out by President Bill Clinton in January 2001. Palestinian diplomats have told me they can accept this package.

Equally important, there is now a near-universal consensus among virtually all the Arab states that a peace settlement is in their interest. Many, including Egypt and Saudi Arabia, are more concerned with the rise of Iran. An agreement with Israel could strengthen their hand in dealing with Iran and deprive the Iranian government of an opportunity to whip up Arab popular sentiment against Arab governments' position on Palestine.

The big question is whether Israel is ready. But, despite the difficult political situation in Israel, there seems to be a growing consensus among the Israeli elite that time is no longer on Israel's side.

It may also help that Israel's foreign policy will now be run by two perceived hardliners, Binyamin Netanyahu (right) and Avigdor Lieberman. Just as it took a Richard Nixon to go to China, it will take a Netanyahu to enforce a peace settlement that will require a withdrawal from most of the West Bank settlements.

When I visited Israel in 1997, I called on then-Prime Minister Netanyahu, as he and I had been colleagues when we both served as ambassadors to the United Nations. I will never forget what he said to me: "Kishore, ignore the media stories. I am in favour of peace".

The broad coalition, including Lieberman and Ehud Barak, also makes peace more likely.

Any good peace settlement requires a powerful mediator. Fortunately, a candidate has arrived in the person of United States Secretary of State Hillary Clinton (right) . Her two predecessors, Colin Powell and Condoleezza Rice, did not have the most important credential: trust from both sides. She does.

I have only shaken hands with Clinton once, early one Sunday morning in a synagogue in New York City several years ago. I was truly impressed that this small synagogue could marshal the presence of New York's two senators, Clinton and Charles Schumer, and several other congressmen for an early breakfast gathering. I could see at first hand that Clinton enjoyed the trust of the Jewish community - a necessary requirement for any Middle East mediator.

Clinton also showed her diplomatic skill when she visited the region in March 2009. She reaffirmed her commitment to Israeli security. She showed concern for the humanitarian plight of Gaza's residents. Her deftness is not surprising. Her husband, Bill Clinton, studied the Middle East problem intensely, which showed in the quality of the peace proposal that he put together.

Undoubtedly, the perception that Clinton will be completing the work that her husband began in the region will be a major motivating factor. Such personal considerations do matter. There is also no doubt that if she succeeds in brokering a two-state solution, she would be a prime candidate for the Nobel Peace Prize.

That outcome would be applauded around the world. Few Americans are aware that rapid globalisation of the Islamic world has produced a political grid that links all 1.3 billion Muslims on some key issues. The Israel-Palestine conflict has produced negative political repercussions that travel instantly to all corners of the Islamic world.

Barack Obama's election as US president and his natural popularity in the Islamic world have helped to curb some of these repercussions. If this could be combined with a peace settlement, the world would suddenly experience a rush of hope that would break through today's global cloud of gloom. And the audacity of hope is what the world needs most today.

Kishore Mahbubani is Dean of the Lee Kuan Yew School of Public Policy, National University of Singapore. His most recent book is ‘The New Asian Hemisphere: The Irresistible Shift of Global Power to the East'.