Washington ? President Bush’s defining choices on Iraq come down to two: clarity, or continued confusion of goals, methods and priorities. His impending address to the nation will reveal the choice he has made. It will also mold his foreign policy agenda for the gathering twilight of his presidency.

Bush will signal whether Iraq will remain the center of his grand designs for the Middle East – or whether it will recede to being one more troublesome conflict in a zone of deadly turbulence and trade-offs. Events, and one key aide, point Bush toward the latter course, with its promise of salvaging his legacy elsewhere.

The aide is Condoleezza Rice, who has developed a personal exit strategy for Iraq. She is tossing that reputation-damaging hot potato to John Negroponte, a former ambassador to Baghdad who is resigning as director of National Intelligence to become Rice’s deputy at the State Department.

His arrival will allow Rice to continue what has long been a minimalist personal engagement with Iraq. She will focus her considerable management skills instead on the Israeli-Palestinian conflict and will soon embark on a high-profile Middle Eastern trip dedicated to reviving a two-state solution.

Negroponte’s move – which may enhance new Defense Secretary Robert Gates’ influence over intelligence gathering and within the administration – is one of a round of changes in military commanders and diplomats that Bush could point to as a sign of a new direction on Iraq. But that would confuse the organization chart with a blueprint for a way out of Iraq. Only clarity of purpose will lead to that outcome.

Here is a four-point program that Bush could adopt to clarify and bolster U.S. purposes in a war the American public now questions and which gets declining military help from coalition nations:

¢ Bush should acknowledge that his hopes for establishing Iraq as a united, free-market democratic model for the Arab World have fallen far short. Iraqis have chosen a more violent, sectarian and decentralized national reality that they must now stabilize or destroy on their own.

The U.S. should therefore call a one-month halt to its offensive actions – a truce, in effect – and encourage Iraqis to do the same. This will facilitate the holding of a peace conference in Baghdad, in which blood-stained radicals such as Shiite cleric Moqtada al-Sadr and Hadith al-Dari, the inflammatory voice of Sunni insurgents, will be asked to participate.

¢ Bush’s speech should recognize that Iran has legitimate interests in security in Iraq and the Persian Gulf region, and pledge that the United States will not use Iraq as a springboard for action against the Iranian regime.

These implicit security guarantees – if met by a proper response from Iran – could be the basis for a broad U.S.-Iranian dialogue and an eventual regional conference to endorse and implement the work of the Baghdad conference.

¢ The U.S. will also extend guarantees of territorial security for Arab states in the Gulf region. Bush should announce that he wants consultations with Saudi Arabia, Kuwait, Egypt, Jordan and other Arab states – as well as principal U.S. allies in Europe – on extending a U.S. or NATO nuclear umbrella over friendly states in the Gulf.

This would be a direct defensive response to Iran’s destructive drive for a nuclear program that can produce atomic weapons. U.S. guarantees would enable Arab states to forgo developing their own nuclear arsenals, just as the U.S.-Japan bilateral security treaty is intended to keep Japan nuclear-free.

¢ As the first president to have explicitly called for a two-state solution, Bush should use Rice’s new burst of activism with Israelis and Palestinians to reinforce his changes in Iraq strategy. U.S. officials hope Rice can get Israel to release 450 Palestinian prisoners soon as a first step to Hamas’ giving up the kidnapped Israeli soldier it holds.

But this heavy new U.S. involvement in the peace process must be included, along with the nuclear guarantees and the Baghdad conference, in a binding U.S. offer to the region’s Sunni rulers in return for their cooperation in calming Iraq now. Bush must show the Saudis, Jordanians and others that they have much to gain from cooperation, and much to lose from continuing to tolerate or encourage the catalytic violence that is destroying Iraq and increasing Iran’s influence.

There are many challenges to overcome in constructing this Grand Bargain. But proposing and pursuing it gives Bush his best opportunity to explain to Americans and the rest of the world the complicated and dangerous new realities that his policies have helped create. Desperate times demand desperate measures, and desperate speeches.