(For other news from Reuters Washington Summit, click on http://www.reuters.com/summit/Washington11?pid=500)
* McCain: Clinton would bring clout to Middle East talks
* Says U.S.-Israeli relations deteriorated under Obama
By Susan Cornwell
WASHINGTON, Nov 8 (Reuters) - Republican Senator John McCain has some advice for President Barack Obama to help energize stalled Middle East peacemaking: Put former President Bill Clinton in charge.
Democrat Bill Clinton, husband of Obama's Secretary of State Hillary Clinton, is always "the smartest guy in the room" and so would he be in a roomful of Israeli and Palestinian negotiators, McCain told the Reuters Washington summit on Tuesday.
The Republican presidential nominee in 2008 who lost to Obama, McCain said Clinton had credibility with both Israelis and Palestinians and had come the closest of anyone to producing peace.
That was an apparent reference to the 2000 Camp David talks between then-Israeli Prime Minister Ehud Barak and Yasser Arafat, the late head of the Palestinian Authority.
"I believe that the president should call in the one person who has a chance of negotiating, having both sides negotiate with good faith, and that's one Bill Clinton," McCain said.
"I would ask him to take on the role of the president's special envoy, mediator, potentate, whatever you want to call it because he's the person that came the closest and he's the person that has the most credibility," McCain told Reuters.
McCain's suggestion was rare praise from a Republican for a Democrat in Washington these days and came as Obama was having a not especially stellar day on the Middle East front, at least not so far as U.S. ally Israel was concerned.
It emerged on Tuesday that Obama apparently failed to defend Israeli Prime Minister Benjamin Netanyahu when French President Nicolas Sarkozy branded him a "liar" in a private conversation that was overheard by journalists.
McCain said that Obama's rejoinder to Sarkozy -- "I have to deal with him even more often than you" -- reflected the "deterioration" in U.S.-Israeli relations since Obama had become president.
QUARTET ENVOYS TO MEET SIDES SEPARATELY
"There has not been one bit of progress" in the Middle East, certainly not on the Israeli-Palestinian front, since Obama was elected, McCain declared.
An Obama administration effort to broker direct peace negotiations fell apart after it was launched last year, and the United States has had little success in bringing the two sides back to the table.
With both sides at a standoff, Obama's Middle East envoy, George Mitchell, resigned earlier this year. McCain said Obama's best chance to turn the situation around now would be to bring in Clinton.
"He (Clinton) has the respect, he has the clout" and the parties would fear upsetting him, McCain said. "And he knows the issue better than anybody."
There is already a Middle East envoy for a group known as the Quartet, a body comprising the United States, the European Union, Russia and the United Nations: former British prime minister Tony Blair.
"I've watched Tony Blair try to make progress," McCain said. But Blair, in seeking to broker new talks, has run into some of the same problems that bedeviled Mitchell's efforts.
Netanyahu says he wants talks now, but the Palestinians say the Israelis must halt all building of Jewish settlements in the West Bank before they return to the table, and that is something Netanyahu's government says it will not do.
Quartet envoys will try again to jump start peace moves on Nov. 14, meeting separately with Israeli and Palestinian officials in Jerusalem, the U.S. State Department said on Tuesday. (Additional reporting by the Reuters Summit Team; editing by Jackie Frank)