Watching the Arab Revolt of 2011 unfold from faraway Washington, it might seem natural to assume that the United States is still manipulating the levers of power in the region. After all, for the past four decades, the kings, generals, presidents-for-life and emirs of the Middle East—not to mention the leaders of Israel—mostly revolved in the US orbit, and many of those who didn’t, such as Iraq’s Saddam Hussein, were crushed.

But, like the Great Oz, the United States has found itself increasingly pulling levers on machinery that doesn’t work. In Egypt and Yemen, autocrats openly defied US diktats. In Libya and Syria, authoritarian rulers flouted sanctions, regime-change rhetoric and, in the case of Libya, resisted a US/NATO military assault for months. Washington’s closest allies in the region, Israel and Saudi Arabia, were furious over the gradual US abandonment of Egyptian dictator Hosni Mubarak.

Uncertain in its response, taken aback by the rebellion’s contagion, the United States alienated allied regimes while simultaneously failing to win much favor with the various opposition movements. Many of those who filled town squares in Cairo, Damascus, Manama and Sana’a—already holding views about the United States that ranged from skeptical to hostile—were disappointed by the Obama administration’s half-hearted support for their demands.

“We didn’t ingratiate ourselves with either the former regimes or the incoming ones,” says Chas Freeman, a former US ambassador to Saudi Arabia who is a frequent critic of US foreign policy in the Middle East. “We’ve not found new friends, and we’ve lost old ones. As a result, our influence in the region is probably the lowest it’s ever been.”

Used to hobnobbing with the region’s long-entrenched rulers, Washington found itself dealing uncomfortably with unknown and unfamiliar leaders or, in some cases, leaderless opposition groups. “All these embassies had to toss out their Rolodexes,” says Marina Ottaway of the Carnegie Endowment for International Peace, an expert on Middle East political transformation. From the young protesters in Cairo’s Tahrir Square and among Egypt’s Muslim Brotherhood to Syria’s amorphous local coordination committees, from Libya’s fractious, Benghazi-based Transitional National Council to Yemen’s dizzying array of well-armed tribes, young Tahrir Square–inspired protesters and Al Qaeda–linked Islamists, the Middle East’s new players threw the Obama administration’s policy-makers off their game.

“It has taken not just us, but many people, by surprise,” declared Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, in early February. The White House was reportedly miffed at the US intelligence community for failing to provide early warning of the explosions, but it’s probably too much to have expected the CIA to predict them. “Not only was it hard to predict, especially with the forces so three-dimensional—social, political and economic—but it’s impossible to know what might be the trigger,” said Wayne White, former deputy director for the Near East and South Asia at the State Department’s Bureau of Intelligence and Research. “The typically demanding policy-maker probably feels let down by the intelligence community, but only because the policy-maker doesn’t appreciate how fluid these things are.” Among those caught by surprise were the protesters themselves. In Cairo, organizers used to seeing a few dozen people show up at demonstrations in recent years were stunned when thousands, and then tens of thousands, descended on Tahrir Square.

Perhaps to deflect criticism that it was unprepared, just days after Mubarak stepped down the Obama administration leaked news of a secret White House staff report prepared in August 2010 concluding that Egypt, Jordan, Bahrain and Yemen were ripe for upheaval. It was prepared by Dennis Ross, Obama’s controversial chief Middle East adviser, along with Samantha Power, who oversees human rights at the National Security Council, and Gayle Smith, an NSC official responsible for global development. According to the New York Times, the report helped motivate a speech in January by Secretary of State Hillary Clinton in Qatar in which she lectured Arab leaders about the need to end corruption and liberalize their political systems.

Ross also managed the White House’s contacts with the so-called Egypt Working Group (EWG), an ad hoc alliance of neoconservatives and human rights activists organized to put pressure on the administration to push harder for democratic change in Egypt. Among its members were a pair of hardline neocons, Elliott Abrams and Robert Kagan, along with Ellen Bork of the Foreign Policy Initiative, a neoconservative think tank founded by Bill Kristol of The Weekly Standard, plus Scott Carpenter and Robert Satloff of the staunchly pro-Israel Washington Institute for Near East Policy. Others included representatives from Human Rights Watch, the Carnegie Endowment, the Project on Middle East Democracy (POMED) and the Center for American Progress. In an April 2010 letter to Clinton, the EWG warned that “dangerous instability and extremism” could engulf Egypt and urged the administration to press Mubarak to carry out “legal and constitutional reforms.” In November members of the EWG met with Ross, Power, Smith and other White House officials. According to one member of the working group, the White House suggested they publicize the meeting. “They wanted us to leak it as a signal to Mubarak,” he says.

From the start of the Middle East revolt, the White House often found itself arrayed against more conservative, tradition-bound elements of the US government, particularly in the Defense Department but also at State. “It was part generational, with some of the younger staff at the White House such as Samantha Power and Ben Rhodes quicker to side with those who supported universal human rights first,” says an EWG source. “But within the administration, the center of gravity was a don’t-rock-the-boat approach.” Adds Stephen McInerney, POMED’s executive director, “The White House was a little ahead of the Defense Department and the State Department on Egypt.” While few in the administration wanted to go back to the aggressive policy of pushing democracy, even by force of arms, that characterized the so-called Freedom Agenda of the George W. Bush administration, before the uprisings “there were quiet discussions in Washington about how to put these things back on the agenda,” says Nathan Brown, an Egypt and Arab affairs expert at George Washington University. “You had people inside the administration who were pushing this.”

Obama, inexperienced in foreign policy, was pushed and pulled in various directions. Tacking too hard in support of democracy and human rights might backfire if the region’s autocrats held on to power. On the other hand, supporting aging dictators in the face of unrest would taint Washington as an unbending ally of oppressive regimes and vastly complicate relations with new forces that managed to topple them. The administration consistently erred on the side of caution, mindful of the concerns of Washington’s two chief allies in the region, Israel and Saudi Arabia, both of which were unnerved by the Arab revolt. In addition, analysts say, the president listened to status-quo advocates who argued that America’s traditional interests outweighed the uncertain pursuit of democratic change. Those interests include, in no particular order, Saudi Arabia’s power in the world oil market, domestic concerns about maintaining Israel’s strategic supremacy in the region, the ongoing campaign against Al Qaeda and its allies, and containment of Iran.

For Obama, the task was to find a middle ground—and the first, and biggest, test would be in Egypt. As the uprising unfolded, the administration migrated slowly from all-out support for Mubarak to overt calls for him to quit. Early in the protests, Clinton notoriously said, “Our assessment is that the Egyptian government is stable,” and Vice President Joe Biden said of Mubarak, “I would not refer to him as a dictator.” Gradually, as it became clear that the dictator could not quell the opposition without massive violence, Obama and Clinton increasingly emphasized the need for an “orderly transition.” Saudi Arabia’s foreign minister, Saud al-Faisal, was livid over US pressure on Mubarak. “We are astonished at what we see as the interference in the internal affairs of Egypt by some countries,” he said.

Behind the scenes, the Obama administration began to call more urgently for the Egyptian military to abandon Mubarak. From Biden, cabinet secretaries and top Pentagon brass on down to mid-ranking officers, the United States deluged Cairo with phone calls. But, contrary to the widely held view that US officials and Egypt’s generals were closely coordinating actions, at the height of the crisis there was palpable fear in Washington that Egypt’s army “might turn their weapons on the protesters,” according to an EWG source, and the generals might carry out a massacre. “What impressed me was the full-court press we put on the Egyptian army, right down to lieutenant colonels who’d gone to staff college with Egyptian officers,” says the Middle East Institute’s David Mack, a veteran US diplomat. “Everyone was told: Do not jeopardize relations with the United States by firing on demonstrators.”

Through it all, however, the administration clearly favored the military as the dominant post-Mubarak institution. Since Mubarak left office in mid-February, the United States has said little or nothing about the unequal balance of power between the clique of generals and the forces of Tahrir Square. “We seem to be clinging to our relationship with the Egyptian military,” concludes Freeman. “We’re stuck in the old rut.”

The Egyptian crisis highlighted a critical dilemma that would plague Washington in dealing with Bahrain, Libya, Syria and Yemen: what happens if the United States calls for regime change—and the regime doesn’t change? “The administration was really afraid of looking feckless,” says Mack. “They were cautious because they didn’t want to take positions they couldn’t back up.” By the same token, however, Washington never clearly signaled it was prepared to use all its leverage to compel the Egyptian military to oust Mubarak. Obama reportedly once threatened to turn off the spigot on $1.3 billion in annual military aid, but according to most analysts, such heavy-handed tactics might have backfired. “The United States cannot be in a position of dictating events,” a senior US official told the Times in late January, leaving aside the question of whether Washington was in a position to dictate anything at all. “President [Anwar] Sadat’s motto was that America holds 99 percent of the cards,” says a senior Arab official, now retired, who spends a lot of time in Washington. “That is no longer true.” To Obama’s credit, he seems to have reached the same conclusion.

The administration correctly rejected right-wing critics who ridiculed Obama for what they saw as a refusal to assert a hegemonic vision of “American exceptionalism,” which they translated to mean that the United States should act like the boss in the Middle East. But as the Arab Awakening spread, the president made a series of missteps in which Washington crossed the line from too cautious conservatism to outright hypocrisy.

The first major misstep came when, in mid-March, the monarchy of Bahrain gave up its dithering and crushed a weeks-long uprising that had brought hundreds of thousands of Bahrainis into the streets to demand reform. The administration was exceedingly—some might say outrageously—circumspect in its response, no doubt because Bahrain sits at the heart of the oil-rich Persian Gulf and is headquarters for the US Navy’s Fifth Fleet. When Saudi Arabia and its Gulf allies sent several thousand troops to aid in the repression, the White House barely made a peep. (“This is not an invasion of the country,” said White House spokesman Jay Carney.) And when Bahraini security forces violently cleared Pearl Square, killing dozens and arresting virtually the entire opposition leadership, the White House merely urged “calm and restraint on all sides” and criticized “provocative acts and sectarian violence by all groups.”

According to Wayne White, the former US intelligence analyst, Washington gave Bahrain a pass out of its desire to placate Saudi Arabia, which saw the potential collapse of the Bahraini royals as an existential threat to the Saudi monarchy, and because Washington has an overblown fear of nearby Iran. “That caused US policy to wobble,” he says. “And that’s an embarrassment.” The key question, suggests White, is: “If this regime holds on, after all this ugliness, is that where we want the Fifth Fleet to be based?” Needless to say, not once during the crisis did the White House hint at withdrawing its naval forces.

The second misstep was Washington’s decision—at virtually the same time it was tacitly endorsing the crackdown in Bahrain—to take military action in Libya to protect rebels in Benghazi from assault by government forces loyal to strongman Muammar Qaddafi. In the case of Libya, traditionalists in the administration—especially Defense Secretary Robert Gates and the Pentagon brass—were reluctant to become embroiled, but the human rights contingent argued otherwise. Susan Rice, the US envoy to the UN; Samantha Power; Gayle Smith; and Ben Rhodes won the day, persuading Obama to intervene.

It was, says Paul Pillar, a troubling decision. Pillar, who retired in 2005 as the US intelligence community’s chief analyst for the Near East and South Asia, disputes Obama’s contention that the US/NATO bombing of Libya was urgently needed to prevent a mass slaughter by Qaddafi’s troops and that the intervention was a humanitarian one. “A bloodbath in Benghazi?” he asks. “There is simply no indication that that was going to take place.” Worse, he says, by bombing Libya the United States has “put the last nail in the coffin for any deal with Iran over its nuclear program.” Tehran, he says, will remember that less than a decade ago Qaddafi decided to give up his nuclear program in exchange for a rapprochement with the West—and yet the West still turned against him militarily. Other analysts point out that in the eyes of Arab citizens from Morocco to the Gulf, the US actions in Libya and Bahrain are the ultimate in hypocrisy, using force against a leader who’s long been a thorn in America’s side while winking at the bloody repression of another dictatorship that happens to host a strategically crucial naval base.

Yemen is another case of a Middle East regime, presumably close to Washington and the recipient of military and economic aid, that seems to pay little attention to US demands. The beleaguered dictator, Ali Abdullah Saleh, met face to face in July with John Brennan, Obama’s counterterrorism adviser, and flatly refused to cede power—even though he had been gravely wounded in an attack on his palace and was seeking medical treatment in Saudi Arabia.

Conflict in the region could get much worse over the next year: interrelated civil wars could erupt simultaneously in Iraq, Syria and Lebanon, with the possibility of continued strife in Libya after Qaddafi’s fall, along with political turmoil in Egypt and, possibly, a new outbreak of violence in the West Bank and Gaza.

Although the United States can no longer bend events to its will, it retains significant clout in the region, and at the very least there are plenty of things it could do to avoid making the situation worse. Whether the Arab Awakening evolves into a network of newborn democracies or deteriorates into regional conflict, the United States must at all costs resist the temptation to get involved militarily. Even with its vast military apparatus, Washington cannot solve the region’s problems by force, whether unilaterally, as President Bush tried to do, or multilaterally, in combination with NATO or Israel.

The United States should quietly inform the region’s remaining autocrats that it will no longer serve as the guarantor of dictatorship. That might convince the royal families that their best option for survival would be to inaugurate democratic reforms rather than face protests without US support. To underline that message, Washington could sharply reduce its vast supply of military toys to these regimes, beginning with suspension of the recently announced $60 billion arms deal with Saudi Arabia.

By sharply reducing its military footprint in the region—reducing to zero its forces in Iraq; reducing its ground and naval presence in Bahrain, Qatar and the rest of the Arab Gulf countries; making parallel cuts in military aid to Egypt and Israel—the United States could begin to wean itself from reflexive reliance on its armed forces. Relying less on the Pentagon and more on the State Department, particularly in diplomacy to seek a resolution of the Israel–Palestine conflict, a Grand Bargain–style accord with Iran and an economic development plan for the entire region would undercut the appeal of extremism and provide the foundation for better long-term relations between the United States and the Arab world.

In any case, for both reformers and revolutionaries, the United States is no longer seen as the ultimate power broker. “When Obama delivered his big speech on May 19 on the US response to the Arab Spring, the Arab world yawned,” says Ottaway. “They were not even bothering to be mad at him. I don’t see the Arabs being interested one way or the other in what the United States is doing. They have given up.” In addition, the inability or unwillingness of Washington to pressure Israel to make peace with the Palestinians has colored the Arab world’s response to US policy. “There is a feeling of indifference toward the United States,” says a senior Arab diplomat, now retired. “The people in the region say, ‘Why should we listen?’”

“The Arabs don’t think we know what we’re doing or that we’re capable of doing much of anything at all, given our dysfunctional politics and knee-jerk genuflection to the Israeli government’s views,” says Freeman. “So far, we have fully met their very low expectations. What comes next in the region will not owe much to us.”