His stint as finance minister (2003-05)earned him little praise abroad, yet he rescued Israel from financial ruin. He also initiated enough structural change to free the country from the shackles of its overburdened welfare state. He resigned from the government in 2005 over the plan to withdraw from Gaza because it would allow a base for Islamic terrorism, a practical consideration borne out by Israel's subsequent clashes with Hamas in 2006 and 2009.

As prime minister Netanyahu has been much more cautious than most of his predecessors. The more centrist Ehud Olmert and his foreign minister Tzipi Livni, Netanyahu's former rival, got embroiled in two wars (in 2006 against Hezbollah and in 2009 against Hamas) while Netanyahu has avoided or sought to limit violent confrontations on Israel's borders.

Despite his ramped-up rhetoric on Iran, Netanyahu has also been cautious on the issue he views as most critical for his country's long-term security. He has not ordered the airforce into action and has patiently worked to push the international community to pressure Iran through sanctions. His best weapon has been bluff — the widespread belief that he is ready to pull the trigger, though his actions show that he is guided by prudence.

Nowhere is this truer than with two other big challenges he faces — the Arab Spring and the peace process. He has tried to walk a fine line between American pressure for a return to talks, Palestinian rejectionism, diminishing international sympathy for Israel, and the fickle nature of his coalitions. 

His Bar-Ilan speech in June 2009, embracing a two-state solution, was never fully appreciated by his Western detractors, who could not grasp the dramatic departure it offered from his ideological roots. His ten-month settlement freeze was unprecedented — yet earned him no credit. 

His recent readiness to free 26 Palestinian prisoners — mostly murderers who carried out terrorist offences — to jump-start peace talks contradicts his previous stance on terrorism. It is also a sign of incredible flexibility for a man who understands the importance of keeping American support amid regional pandemonium.