Unlike many U.S. embassies in the Arab world that have been forced by security concerns to move from the center of capital cities to fortress-like suburban compounds, the Damascus embassy still occupies prime real estate — just a stone's throw from the residence of Syrian President Bashar al Assad. Syria's much feared state security apparatus keeps close tabs on everyone entering and leaving the embassy, but it also helps keeps the embassy relatively safe from the occasional jihadist sneak attack. In turn, living close to the Americans may also help Assad sleep more easily at night, say Damascene wags, because the proximity of the embassy would make the U.S. and Israel think twice about every trying to dropping a bomb on him.

But news that the embassy is set, for the first time in five years, to have have a resident ambassador is a sign that the "can't live with 'em/can't live without 'em" U.S.-Syrian relationship is about to enter a new phase. The State Department has presented the credentials of Robert Ford, former U.S. Deputy Ambassador to Iraq, to the Syrian government for approval as ambassador in Damascus, according to the Syrian government. The Ambassador's residence in Damascus has been empty ever since the Bush Administration accused the Assad regime of orchestrating the 2005 assassination of Lebanese former Prime Minister Rafik Hariri, and removed then-Ambassor Margaret Scobey in protest.

Although the U.S. still accuses Syria of supporting militant groups in the region, the appointment of a new ambassador is recognition of a new spirit of semi-cooperation from Damascus. Since the waning days of the Bush years, Syria has helped tighten its border with Iraq to prevent jihadists from crossing; it has for the first time recognized Lebanon's sovereignty by opening an embassy in Beirut (Damascus has traditionally regarded its neighbor as a Syrian province illegitimately turned into a separate entity by the France in the wake of World War I); and has regularly called for direct peace talks with Israel. The re-appointment of an Ambassador would also be of a piece with the Obama Administration's strategic policy to engage its adversaries, and with wider U.S. geopolitical interests in the Middle East. Though the Bush Administration first toyed with toppling the Assad regime and then settled for simply ignoring it, Obama has tried to coax Syria away from the so-called "Rejectionist Crescent" — the arc of countries and militant groups from Tehran to Gaza that stand in opposition to U.S. and Israeli power.

For Syria, the return of an American Ambassador is a much desired signal that the U.S. needs Syria — to help stabalize Iraq, to keep the peace in Lebanon, and to solve the Arab-Israeli conflict. Syrians like to think of their country as the crossroads of the Middle East, and grew worried when Damascus simply fell off the itinerary of most major world players. Even more worrying is the country's dismal neo-Soviet style economy, which needs reform and foreign investment if it is to create enough jobs for the country's young, growing and restless population.

But if Mr. Ford does indeed take the road to Damascus, he will want more than just Arab hospitality when he gets there. He'll expect Syria to distance itself from its old friends in Hamas, Islamic Jihad, and Hizballah, and will hope to coax Assad away from his alliance with Iran. But the Syrians aren't in such a hurry. While Damascus might be ready to recognize Israel if it hands back the Golan Heights, captured from Syria in 1967, it reserves the right to support Palestinian and Lebanese militants as long as Israel occupies Palestinian and Lebanese territory (the latter being a reference to the Shebaa Farms area, which Hizballah claims is Lebanese but U.N. maps show as Syrian). Real peace, say the Syrians, will have to wait for a comprehensive "grand bargain" that will settle all of Israel's conflicts with its neighbors. But critics charge Syria wants the economic benefits of normal relations with America and the West, without having to giving up on the military alliances that give it strategic influence in the region.

Luckily for Syria, perhaps, Israel is dragging its feet even more on the peace front. Having separated themselves from an ever-hostile Palestinian population by withdrawing from Gaza and walling off the West Bank, the Israeli public has lost interest in "land for peace" deals. So not only are Israeli-Palestinian peace talks largely moribund, but the Netanyahu government has dodged Syrian calls for direct talks, calling instead for indirect talks whose goal would be to agree a cessation of hostilities rather than a return of the Golan Heights. That's a non-starter for Damascus; no Syrian government could make peace without recovering the Syrian territory Israel occupies.

Merely talking about peace will only last so long, however, until talk turns again to war. And that's exactly what's happened over the past few days as Israeli and Syrian ministers have traded threats, with hard-line Israeli foreign minister Avigdor Lieberman on Thursday threatening to topple the Assad regime. "When there is another war, you will not just lose it, but you and your family will lose power," said Lieberman. So as the U.S. moves to restore relations with Damascus, its first order of business may be crisis-management: to calm rising Israeli-Syrian tensions and get both sides talking again.