WHAT to make of a speech on Sunday June 14th by the Israeli prime minister, Binyamin Netanyahu, in which he reluctantly but explicitly articulated his acceptance of the idea of a two-state solution for Israel and the Palestinian territories? Local commentators have made much of the image of pulling teeth, suggesting that Mr Netanyahu spoke largely in response to pressure from the United States.

Looking ahead, it will be up to America’s president, Barack Obama, to make the most of Mr Netanyahu’s concession by trying to produce conditions for productive peace talks between Israel and the Palestinians. That will not be easy. For a start Mr Obama has to consider Mr Netanyahu’s effective rejection of his demand for a freeze on the building of settlements by Israelis in Palestinian territory. Mr Netanyahu pledged not to build new settlements or to appropriate more land; but he insisted that “normal life” must continue in the existing settlements. That is code for continued building there.

The initial White House reaction was to praise what Mr Netanyahu’s own aides breathlessly described as the prime minister’s “Rubicon”. A statement from Washington welcomed “the important step forward in Prime Minister Netanyahu’s speech” in his “endorsement” of the goal of seeing two states created. In addition the statement promised that America would work with all parties to see obligations fulfilled for the sake of achieving the two-state solution. That could be interpreted as a roundabout reiteration of Mr Obama's commitment to stop the settlements. The Palestinians, who were withering in their dismissal of Mr Netanyahu's speech, will be anxiously hoping that Mr Obama does intend to do so.

The Palestinian Authority (PA) said that Mr Netanyahu's catalogue of conditions dashed hopes of a resumption of negotiations, saying that he had “sabotaged all initiatives, paralysed all efforts being made,” according to a spokesman for the Palestinian president, Mahmoud Abbas. Other PA officials were more outspoken, saying that Mr Netanyahu had rendered himself a “non-partner”. Hamas condemned the speech as racist.

Within Israel the prime minister's finely balanced rhetoric is unlikely to provoke a big storm. Although he accepted an eventual Palestinian state alongside the state of Israel, Mr Netanyahu ringed it around with sufficient conditions and provisos to ensure that, at first at least, his ideological shift does not imperil the stability of his rightist-religious coalition. The Palestinian state, he said, could arise only if it fulfilled two “principles”.

The first of these is that it must “clearly and unambiguously recognise Israel as the state of the Jewish people”. By that Mr Netanyahu means that Palestinian refugees must be settled outside of Israel’s borders, as resettlement within the country would, he said, undermine its existence as Jewish. Secondly, he demanded that a new Palestinian state must be “demilitarised, namely, without an army, without control of its airspace, and with effective security measures to prevent weapons smuggling into the territory”. He dismissed current attempts at monitoring weapons smuggling in Gaza and added that Palestinians would not be permitted to forge military pacts with other countries.

Mr Netanyahu added other “positions” that he would hold in any negotiation: Israel would need “defensible borders”; Jerusalem would remain as the united capital of Israel; there would be continued religious freedom for all faiths. Mr Netanyahu seemed to cast his principles and conditions in categorical, take-it-or-leave-it terms. He ignored the various Israeli-Palestinian negotiations over the past two decades, under three American presidents, which were designed to attempt to resolve precisely the vexed issues of recognition, demilitarisation, borders, Jerusalem and refugees. In 2000-2001 the prime minister of the day, Ehud Barak, who is now defence minister, wrestled with the Palestinian leader, Yasser Arafat, over a peace package proposed by Bill Clinton. That package embraced all of these questions. Mr Barak was ready to accept it, but Mr Arafat balked.

On the far right of the Israeli political spectrum, there has been some strident talk of surrender and betrayal. But within the coalition criticism is muted. The three Knesset Members of a small Likud ally, the Jewish Home Party, have grumbled in public and there is likely to be some sniping at Mr Netanyahu within Likud. But the atmosphere in no way evokes the sense of upheaval that Ariel Sharon triggered in 2003-2004 when he swung his policy away from protecting all the settlements to the forcible removal of two dozen of them in Gaza and the West Bank.