NEW YORK-The biggest foreign-policy challenge awaiting President-elect Barack Obama isn't Iraq or Afghanistan but Pakistan, President George W. Bush's national-security adviser Stephen Hadley has said. In an interview with The Wall Street Journal previewing a valedictory speech he plans to give on Wednesday, he said that Pakistan's increasingly turbulent border region poses threats not just to the US mission in Afghanistan, but also to neighbouring India, as seen by the recent Mumbai terrorist attacks, as well as to urban areas of Pakistan itself and the world beyond. 'If extremists succeed in destabilising Pakistan, the resulting chaos will threaten the entire region', Hadley is expected to say in his speech, according to the Journal. 'You can't really solve Afghanistan without solving Pakistan', Hadley told the leading financial daily in an interview in his White House office on Tuesday. 'That's why I think Pakistan is at the centre' of the challenge for the incoming administration. Hadley cited relations with Russia as another challenge facing the Obama admin, highlighted this week by a confrontation between Russia and Europe over natural gas supplies. In his speech, Hadley also is expected to acknowledge challenges for the US in the long-running Israeli-Palestinian conflict, as well as in efforts to curb Iran's apparent nuclear ambitions, the Journal said. Yet Hadley, a lawyer who has served Bush during his entire eight years in office, sounded notes of optimism in both areas as well, it said. He is expected to say on Wednesday that Iran remains the biggest problem in the Middle East. But US progress in mending fences with Western Europe means that the next administration should be able to enforce tougher sanctions on Iran. In the Israeli-Palestinian conflict, Hadley predicted that a ceasefire will be reached over the embattled Gaza Strip region, but wouldn't predict when, and suggested that the US isn't budging from its demands that a cease-fire be sustainable and durable. The administration also wants security officers of the Palestinian Authority to take over responsibilities for monitoring border crossings around Gaza, a move that could elevate the Authority's status in the area, now dominated by the militant group Hamas. Longer term, Hadley suggested that notwithstanding the Gaza violence the Israeli-Palestinian conflict presents the incoming Obama administration with a genuine opportunity for progress on a peace deal, because of economic and political progress already being made in the West Bank. He held out hope that Gaza's people will increasingly view the progress being made in the West Bank as a reason to turn away from Hamas, which controls Gaza, the Journal said. It is even possible that a long-term peace agreement could be reached in the coming year, Hadley suggested. 'You can see how it could come about', he was quoted as saying. On Iraq, he said he hopes the Obama administration will stick to the timetable for withdrawing troops set out in recent strategic agreements with the Iraqi govt. 'We would hope that the new administration would...make any reduction a reflection of progress that's been made on the ground', he added.