If enough goes right in his next term, George Bush will have achieved greatness

He has already changed the course of US history, ensuring he will rank with Washington, Lincoln, FDR, Reagan

For George Bush, there can be no middle way. He is either doomed to failure, or destined for greatness. It is impossible to predict the outcome of the second half of his presidency, but on one point we can be absolutely certain. He is not about to subside into compromise or mediocrity. This president has set enormous events in motion. He has deployed bold strategies in pursuit of grandiose goals and visions. He has already changed the course of American history, ensuring that he will rank with Washington, Lincoln, FDR, Reagan: presidents who made a profound difference.

For George Bush, there can be no middle way. He is either doomed to failure, or destined for greatness. It is impossible to predict the outcome of the second half of his presidency, but on one point we can be absolutely certain. He is not about to subside into compromise or mediocrity. This president has set enormous events in motion. He has deployed bold strategies in pursuit of grandiose goals and visions. He has already changed the course of American history, ensuring that he will rank with Washington, Lincoln, FDR, Reagan: presidents who made a profound difference.

They are all acknowledged as successful; there is no guarantee that George Bush will join them. If everything goes wrong, he could be hooted from office while his party is hurled into outer darkness. But if enough goes right, this improbable man will have achieved greatness.

The Middle East is the cauldron of his fate. It is a desperately difficult region to rely on for an assured success, though it is more stable than it appears. At any time over the past few years, most analysts would have predicted multiple disasters, almost instantly. Yet matters somehow stagger on, like a grumbling volcano which spits lava and belches cloud, but never actually erupts. The old adage that there is a deal of ruin in a nation also applies to Middle Eastern countries - or rather it did, until Mr Bush intervened.

He has already caused one eruption, in Iraq, and it is impossible to foresee the consequences. If the attack on Fallujah is successful, thus eradicating the Iraqi equivalent of a Taliban enclave, it may be that the forthcoming elections will be able to take place without too much disruption. After all, if it is possible to hold an election in Afghanistan, it should not be impossible to do so in Iraq. If the election produces a government which can persuade the Sunnis that their rights will be protected, it may be possible to make progress. Iraq has suffered needlessly through two mistakes in the early weeks of occupation: the dismissal of the army and the de- Baathing of the administration. That made matters in the Sunni triangle much worse than they need have been. But the next few months may see a partial recovery.

If that occurs, it will make it easier to deal with Iran. It is impossible to understand the mentality of the Iranian government, but there are signs that bravado and Muslim fundamentalism are tempered with caution. The mullahs must be aware that if they go beyond certain lines they will provoke a confrontation with the United States. Under this president, that could lead to war. This is one advantage of re-electing Mr Bush. With him in charge, potentially hostile nations know where they stand. This may make it easier to come to an accommodation with the Iranian regime.

Equally, the world is about to enjoy some good luck, with the passing of Yasser Arafat. George Bush, who is prone to make simple decisions on moral criteria, had done just that about Chairman Arafat. He had decided that there was no point in negotiating with him. A new Palestinian leadership should be able to press the president to act on his many pronouncements in favour of a Palestinian state.

It will not be easy to achieve that. Especially while Mr Sharon remains in charge, Israel is not a glove puppet waiting for an American hand. The Israelis have long experience in manipulating the political process in Washington and in exploiting the fact that American presidents have so many other preoccupations that they are unable to devote sufficient time to the Palestinian degringolade. Moreover, George Bush is personally sympathetic to Ariel Sharon's political problems over the evacuation of Gaza.

But this is a president who says what he means and means what he says. He has committed himself to the establishment of a Palestinian state, and it would be out of character for him to hold back from the challenge of turning words into deeds. Nor is it easy for anyone in the Bush administration to ignore the obvious intellectual argument: that an American administration which allowed the struggle for human rights and democracy to end at the River Jordan would have no defence against the charge of hypocrisy. George Bush the architect of a Palestinian state: it would be a strange development, but not an inconceivable one.

Mr Bush has been almost as radical in his domestic economic policies as he has been in the Middle East. Had Al Gore been elected president in 2000, there would have been one obvious difference between his administration and Mr Bush's. President Gore would not have spent nearly as much; the Congress would not have permitted it. Adrian Wooldridge of The Economist has used the phrase "big-government conservatism'' to describe Mr Bush's economic policy.

On both sides of the Atlantic, there are many doubting conservatives, such as Norman Lamont, who believe that big-government conservatism ought to be an oxymoron, and that there is nothing conservative about George Bush's spending programmes. There are those who regard the President as a reckless ultra Keynesian, responsible for an uncontrollable deficit and the threat of inflation. Yet it could be that he has succeeded in permanently reducing the tax burden, in devising new forms of public-private partnerships in health care, social security and pension provision, and that he can rely on economic growth to eliminate the deficit.

One point is certain. In his first four years, George Bush did not veto a single spending bill sent to him by Congress. He cannot continue with such profligacy. He will have to hope that the enlarged Republican majority in the Senate will make it easier to control public spending. It is not impossible that the President will succeed in bringing the deficit under control, while demonstrating that his spending increases have been worthwhile. If so, he will have vindicated big-government conservatism.

At present, George Bush believes that his own brand of conservatism has been vindicated. Over the past four years, he has grown in self-confidence, a process which reached its apotheosis last week. Mr Bush is grateful to his aides and advisers. He shares to the full the Bush family trait of never forgetting a debt of gratitude, or a grievance. But ultimately, he regards the victory as his, and the mandate which goes with it.

During the first term, it often seemed as if the administration was paralysed by disputes between the State Department and Pentagon: Colin Powell and Donald Rumsfeld. Whatever the fate of individual cabinet members, that will never happen again. Though George Bush has always been far more in charge than his liberal critics would acknowledge, in future there will be no grounds for doubt. He will stamp his authority on the second term, and on all those who serve him.

The re-elected President is a formidable figure. He has come to the conclusion that he is a man who walks with destiny and can inspire his nation to overcome all challenges and to enter on its next phase of greatness. Although this could all break down under the pressure of events, it will be an exhilarating process.