In U2 by U2 Bono mentions that people have suggested to him that the song is a portrait of Ali, but honestly I can't image why. The song is rather bitter and dark, mocking turned to hurt. He explains that the lyric is from the perspective of a person who has lost their faith, looking at the world and seeing no light, then looking at a person who has kept their faith and not being able to understand how they can hold on to their hope and visions of beauty. The protagonist begins by taunting and sneering at the person of faith ("I look at you with your holy book, while the rest of us choke"), but moves on by the end of the song to the protagonist envying the other's belief and breaking away from the argument in pain and self-doubt. The last two lines say it fairly clearly:
Tell me, tell me, what do you see?
Tell me, tell me, what's wrong with me?
I have a very strong feeling that the protagonist here is Bono's dad, and Bono is the person of faith.
ETA: As for the "waiting room" imagery, Bono has said that this is taken from the memory of being at the hospital when his mother was dying, a time when people could smoke in the waiting rooms.