"In the next four years there is going to be a permanent status arrangement between Israel and the Palestinians on the basis of two states for two peoples, and it doesn't matter to us at all who is prime minister"
White House chief of staff Emanuel Rahm, source
On the two-state solution Obama's speech today was pretty clear:
That is in Israel's interest, Palestine's interest, America's interest, and the world's interest. That is why I intend to personally pursue this outcome with all the patience that the task requires. The obligations that the parties have agreed to under the Road Map are clear. For peace to come, it is time for them – and all of us – to live up to our responsibilities.
Obama can hardly retreat from that and from his demand to stop all settlement construction. At least if does not want to end as Bush III.
Netanyahu's brand new cabinet seemed shocked and held an emergency meeting. He had hopped to somehow wiggle out of the dilemma Obama put him in. He had been given time until July to formulate a new policy. But the speech is a too public commitment by Obama. The "audience cost" to back away from that is too high. Now there is no wiggle room left for Netanyahu.
Netanyahu's coalition depends on radical settler parties that will likely leave should he really stop settlement construction and commit to a two-state-solution. If he does not Obama will turn the screws on him. The outcome will be similar to his period as prime minister 1996-99 when he had to leave in disgrace.
So what is he to do? Well, if the game is against you, toss up the chess board.
The simplest way to do that is to start a war or at least some conflagration that changes the picture. The usual 'enemies' are always available. Another round with Lebanon is possible and could be justified when Hizbullah and its coalition partners win the Lebanese elections next week.
Another round with Syria is unlikely. Syria does not fall for Israeli provocations as last years attack on the 'box at the Euphrates' demonstrated. A new round on Gaza will not change the picture. A direct massive attack on Iran is too difficult. But if the Iranians could be provoked to 'attack' Israel in response to some provocation?
The media field is well prepared to report an 'Iranian aggression' even when it would not be one. The Washington Post editors still write of how "Russian forces poured across Georgia's borders" when indeed Georgia started the war.
Now what could Netanyahu believe would provoke Iran to a violent response? Would a cruise missile fired from an Israeli sub do? Maybe two? What to hit? Or is Lebanon the better target?
You can be sure that Netanyahu is pondering these questions. The alternative is his downfall.