Firstly, the speech was a direct response to US President Obama's Cairo speech. Three things immediately come to mind. He directly challenged Obama's assertion that the Israeli-Palestinian conflict does not lie at the root of all Middle East conflicts – one just has to revisit any Arab League conference and it becomes readily apparent it is not so. Secondly, he directly contradicted Obama's grasp of history, and rightly so.
Finally, he outlined what conditions would have to result for his administration to accept the establishment of a Palestinian state. This last point, in itself, was probably the biggest concession he made. I am not a fan of the so-called two state solution. I don't believe in the viability of an independent Palestinian state is possible.
Even now, the Palestinian economy would completely collapse if Israel severed all relations. All the models I have seen for an independent Palestinian state require massive injections of capital over a long-term period as well as operating on the premise that the Palestinian state would be fully integrated with the Israeli economy. For example, the most extensive analysis has to be the Rand Study. Take away economic integration and Palestinian statehood becomes just another failed state.
This is probably the biggest concession Netanyahu made. Although, I doubt the Palestinian Authority is up for the challenge. In fact, I know its not judging by this reaction in Jerusalem Post:
Palestinian Authority officials in Ramallah expressed outrage and shock on Sunday over Prime Minister Binyamin Netanyahu's call for the establishment of a demilitarized Palestinian state and his demand that the Palestinians recognize Israel as a Jewish state. The officials said that the speech that Netanyahu delivered at Bar-Ilan University was much worse than they had expected. They also warned that Netanyahu's policies would trigger a new intifada. Some of PA President Mahmoud Abbas's top advisers accused Netanyahu of "burying the peace process" and said the ball was now in the court of US President Barack Obama.
"Netanyahu's speech is a blow to Obama before it's a blow to the Palestinians and Arabs," an Abbas aide said. "It's obvious, in the aftermath of this speech, that we are headed toward another round of violence and bloodshed." Abbas's office issued a terse statement in which it accused Netanyahu of destroying efforts to achieve peace in the region. "The speech has destroyed all initiatives and expectations," the statement said. "It has also placed restrictions on all efforts to achieve peace and constitutes a clear challenge to the Palestinian, Arab and American positions."
Nabil Abu Rudaineh, a spokesman for Abbas, also lambasted Netanyahu for refusing to recognize Jerusalem as the capital of the future Palestinian state and his call for solving the issue of Palestinian refugees outside Israel. "Netanyahu's remarks won't lead to a just and comprehensive peace based on United Nations resolutions," Abu Rudaineh added.
Yasser Abed Rabbo, a senior PLO official closely associated with Abbas, launched a scathing attack on Netanyahu, calling him a "swindler and liar." Netanyahu wanted the Palestinians to join the Zionist movement by offering them a state under the protectorate of Israel, Abed Rabbo said. He also rejected Netanyahu's demand that the Palestinians recognize Israel as a Jewish state.
What's that old saying about the Palestinians? Never missing an opportunity to miss an opportunity. Talk about being true to type. I got a perverse chuckle out of the suggestion of the suggestion that Netanyahu's position will just lead to another round of violence and bloodshed.
I mean has the violence and bloodshed every really stopped? I have doubt there has been a week which has gone by when the IDF hasn't confiscated weapons or bomb making apparel at at least one checkpoint into Israel proper. As far as another intifada goes – well even, Abbas recognized the Palestinians paid a much higher price and achieved nothing for their efforts. Sure – go ahead and launch it again but remember this time Israel has never unlearned the lessons from the last intifada nor will the Israeli state be so easy to harm this time round.