This article examines the goals of George W. Bush’s Middle East Policy and its legacy in the region. It further gives a detailed analysis of three major dilemmas in US policy - Iraq, Iran, and Lebanon - towards the region at the present time. It then examines Barak Obama’s declared positions on these issues during his election campaign and his possible course of action in the region as president. The article suggests that Obama’s Middle East policy will most likely be a continuation of that of the democrats – especially Clinton’s – in the Middle East. In all the three areas, In order to make any progress towards solving these problems, Obama needs to agree to direct negotiations, without pre-conditions, with Iran .