Netanyahu stressed the historic rights of the Jewish people to the Land of Israel (Palestine) and rejected Obama’s interpretation of the Holocaust as legitimation for the Jewish state. He pointed out that a Jewish state where persecuted Jews could flee the Nazis would have prevented the Holocaust.

Despite the ancient Jewish claim to its historic patrimony, Netanyahu expressed willingness for a territorial compromise in order to satisfy the national needs of the Palestinians (a two-state solution). A large majority of Israelis is ready for a repartition of the Land of Israel. Netanyahu’s acceptance of a Palestinian state came with conditions. His demand for a demilitarized state reflects the ingrained and justified Israeli fears of their dangerous neighbors. Since Oslo, more Israelis have been killed by Palestinians than during the 1973 October War. Netanyahu also demanded the long overdue recognition of Israel as the Jewish nation-state. In line with Israeli consensus, he insisted on Jerusalem remaining the undivided capital of the Jewish state and opposed a total freeze on building in the settlements.

The speech positioned Netanyahu at the center of Israeli politics. His coalition remains strong and a majority of the Kadima opposition party in the Knesset prefers to join the government. Netanyahu’s centrist approach also strengthened the chances that his coalition will survive potential tensions with the United States. Netanyahu reluctantly agreed to mention the two-state solution to please the United States. Even the hawkish faction within his party, the Likud, understands that statements are not enough to create a new political reality. Capturing the center of Israeli politics will allow Netanyahu flexibility if there is an opportunity for peace as well as the needed stature to lead Israel in continuous protracted conflict.

It is not yet clear if Washington is looking for a confrontation with Jerusalem by focusing on a total settlement freeze. Israelis are likely to view such an insistence primarily as a pretext for ulterior motives and are likely to support their government. The territory of the settlements is less than 2 percent of the West Bank. After all, even the PLO agreed to an exchange of territory to incorporate the bloc settlements into Israel.

Moreover, the Israeli political system has demonstrated its capacity to remove settlements when necessary. Israel dismantled settlements in Sinai in the framework of a peace treaty with Egypt in 1981 and in Gaza and Samaria in 2005. Finally, the Palestinian demand to receive a Judenrein area is racist and unacceptable. If Israel hosts an Arab minority, why can’t a few thousands of Jews reside in a Palestinian state, which occupies part of the Jewish homeland?

The Israeli government will try to avert a crisis in U.S.-Israeli relations and will hope for a fast learning curve by the Obama administration. The Obama vision of an Israeli-Palestinian peace agreement within two years is unrealistic. Jerusalem can still count on a reservoir of friendship on Capitol Hill and by the American public at large. Due to this support, Israel might decide to put up a fight and play for time. Nowadays, Netanyahu is in a better position to do it.

Efraim Inbar is professor of political studies at Bar-Ilan University and director of the Begin-Sadat (BESA) Center for Strategic Studies.