America's best hope of transforming from a superpower to a 'smart power' comes from its president and inspiring orator - Barack Obama. His speech at the University of Cairo on Thursday can be understood in this context.

Obama, who often uses examples from his own life in his speeches, spoke about his paternal family with its generations of Muslims and of his Muslim Kenyan father. He twice mentioned his childhood in Indonesia, which has the world's largest Muslim population. Obama also referred to his middle name, Hussein, to hint that of all the American presidents, he might be the one with the best understanding of Islam and its traditions. He used symbols from his life story to show that he is willing to open a new page between the United States and the Muslim world.

Through his references to Islam, whether about his family heritage or citing verses from the Quran, the speech targeted two interconnected audiences: Muslim populations around the world and - more specifically - Arab Muslims.

To Muslims in general, Obama highlighted the role of Islam in America and made it clear that the United States does not intend to stay in Afghanistan longer than it takes to stabilize the country. He reiterated 2012 as the final date for American withdrawal from Iraq.

Obama made an appeal to Muslims around the world to understand the devastating effects of the September 11 attacks, and called on them to isolate radicals who stand behind such attacks, and who might be planning future ones. Obama expressed his disagreement with the French government, without naming it, for banning female students from wearing the veil in public schools. He also voiced opposition to the argument against the veil in general.

Addressing the concerns of Arab Muslims, Obama emphasized the American-Israeli relationship and reiterated Washington's unwavering support for the Jewish state. He also put out a message - so far the strongest - that is at odds with the policy of the current Israeli government: 'The United States does not accept the legitimacy of continued Israeli settlements. This construction violates previous agreements and undermines efforts to achieve peace. It is time for these settlements to stop.'

Obama praised the Arab Peace Initiative, which would certainly strengthen what is known as the alliance of Arab moderate states that include Cairo, Riyadh and Amman. Yet he pinpointed the weaknesses of such an initiative that, according to several experts, lacks the needed scope and mechanism for implementation.

On a more pressing note, Obama reiterated his plan for dealing with Iran's nuclear ambitions by highlighting a popular argument in the region: the double standard that allows Israel and Western countries to possess nuclear weapons but forbids Iran from doing so. Obama suggested a solution that would allow each country access to nuclear technology, but not nuclear weapons.

Finally, in a clear departure from his predecessor George Bush, Obama offered to replace the policy of promoting democracy with the more subtle support of human rights everywhere. It is likely that Obama's speech will increase his popularity amongst Muslims and help improve America's image abroad.