JERUSALEM, (AP) – Israelis and Palestinians have already handed President Barack Obama his first international challenge.

In Gaza, the West Bank and Israel, people are waiting with cynicism, suspicion and hope to see how the new U.S. leader handles the issue.

Obama’s inauguration became the lead story in Israeli media, which had been dominated by coverage of the Gaza offensive that began with a massive air bombardment on Dec. 27.

The front page of Yediot Ahronot, Israel’s biggest daily newspaper, featured the smiling Obama and his wife over an English headline: “Good luck.”

Seemingly timing its withdrawal to Tuesday’s inauguration, Israel had already pulled most of its troops out of the ravaged Gaza Strip after a deadly three-week offensive aimed at halting years of militant rocket fire. But the crisis is not over, with reports of shooting along the Israel-Gaza border, and with Israeli soldiers poised to resume the assault if Gaza militants break a fragile cease-fire.

Gazans continue to pull their dead from the rubble. Across the region, rage at Israel has grown with a Palestinian death toll that Gaza health officials and the U.N. say has inched over 1,300, at least half of them civilians. Thirteen Israelis were also killed during the offensive.

Palestinians largely see the U.S. as tilted unfairly toward Israel, and many remain pessimistic about the new administration.

“I’m sure that it’s going to be the same. I never get any hope from the American side that they will give any peace for the Palestinians,” said Mohammed Jabri, a physician in the West Bank town of Ramallah. The West Bank, led by President Mahmoud Abbas of Fatah, together with the Hamas-run Gaza is supposed to one day make up a Palestinian state.

Some of Obama’s views, like his stated willingness to talk to Iran, have suggested to some that U.S. policy could shift, as have more ephemeral differences like his family’s ties to Islam and his race.

Others have pointed to his expressions of support for Israel and the strong Israel backers — chief of staff Rahm Emanuel and Hillary Clinton for secretary of state, for example — he chose for key jobs in his administration.

Obama promised to be involved in Middle East peacemaking “from day one,” and he might have to deliver. Strong U.S. prodding will be necessary for a long-term arrangement to keep the peace in and around Gaza and to move Israelis and Palestinians closer to a peace agreement.

The internationally backed agreements hammered out over the past week to end the fighting in Gaza remain vague, their crucial details apparently unresolved. Though Israel says it delivered a military drubbing, Hamas — which the U.S. considers a terrorist organization — is still in control of Gaza, has claimed victory and could emerge stronger.

Hedva Bar-Yohai, a 22-year-old supermarket employee in the southern Israeli town of Sderot, a favorite target for rockets from Gaza militants, said Obama would be jumping head first into the “sick bed” of the Israeli-Palestinian conflict.

“He’s getting a pretty shabby inheritance,” she said.

Unofficially, Israel’s government has been concerned that Obama might take a more detached approach, especially in comparison to the unyielding support the country received from his predecessor. But the country was enthusiastically following the lead-up to the inauguration.

“We, in our little corner, in the Middle East, in Israel, are tensely waiting to see whether you will continue the tradition of American presidents of recent generations and will view us as allies, as your forward aircraft carrier in this bloody part of the world,” read an editorial in Yediot Ahronot.

Some in the Gaza Strip hope Obama will be more supportive of the Palestinians. “We hope his arrival will bring good for our people. We are optimistic and we hope that he could show sympathy toward us, more than others,” said Hani Saad, 58, a tailor in Gaza City.

In Ramallah, Palestinian political analyst Ghassan Khatib said Obama would certainly be an improvement.

“The current administration has been so damaging to the Middle East, things cannot be any worse,” he said. “You can’t exaggerate expectations, but the little things will make a difference.”

Both sides might have to wait before the new president can deal with their problems.

Obama faces more pressing issues and is likely hoping that the tentative Gaza cease-fire struck over the weekend will hold and give his administration some breathing room, said David Ricci, a political scientist at Hebrew University and an expert on U.S. politics.

“The American economy is on his mind, and I’m sure he thinks that if we in the Middle East have lived with this for 60 years we can handle it for a little while longer,” he said.