If Netanyahu and the Israelis felt like gloating last night and this morning, that feeling is long gone. President Obama’s speech at the UN General Assembly this morning laid down some very important markers for all parties and committed the United States to a number of principles and positions that are going to make life extremely difficult for any Israeli government that does not wish to cooperate on peace or thinks it is going to get a free ride from this administration. Indeed, in many ways the speech corrected widespread misunderstandings of what happened yesterday in the bilateral and trilateral meetings, and underscored the seriousness of the Obama administration, and the fact that they have neither been deterred nor backed down in any meaningful sense on peace. Most importantly, it greatly strengthens the Palestinian hand in the run-up to permanent status negotiations.

On the major issue that has dominated until now, the settlements, President Obama laid down the following marker: “we continue to emphasize that America does not accept the legitimacy of continued Israeli settlements.” This only underscores what was obvious from what happened yesterday: the United States has kept the settlement issue alive, accepting Israel’s private assurances privately but continuing to insist that settlement activity is not legitimate. This means that (I would argue in marked contrast with what other administrations in the past would undoubtedly have done) Obama has retained the settlement issue as a card to play with Israel in the event of any future crisis. The settlement issue is on hold, but it is by no means off the table, as today’s speech makes crystal clear.

President Obama said today that, “The goal is clear: two states living side by side in peace and security – a Jewish State of Israel, with true security for all Israelis; and a viable, independent Palestinian state with contiguous territory that ends the occupation that began in 1967, and realizes the potential of the Palestinian people.” This is worth parsing, as he has acknowledged that Israel is a “Jewish” state, without defining that (and since Israel defines itself, this is pretty well beside the point), but speaks of a Palestinian state that ends the occupation that began in 1967. This anticipates a border conversation that entails less rather than more modifications to the armistice lines of 1949. It is not the kind of rhetoric likely to be pleasing to Mr. Netanyahu, to say nothing of his coalition partners. Even less Israeli-oriented was President Obama’s suggestion that he intends to, “develop regional initiatives with multilateral participation, alongside bilateral negotiations,” although there might be a way for them to live with that.

But perhaps most pointed were his observations that, “all of us must say publicly what we would acknowledge in private,” which in the past might have stung Arab eyes more, but at the moment seem very squarely aimed at the Israeli government. That this observation was immediately followed by the point that, “The United States does Israel no favors when we fail to couple an unwavering commitment to its security with an insistence that Israel respect the legitimate claims and rights of the Palestinians,” indicates a strong connection between the two thoughts. Under this President, the United States does not intend to allow the strategic relationship with Israel to contradict the strategic need for peace and Palestinian independence. And, in another passage that might have been written in reference to yesterday no matter when it was actually penned, the President affirmed that, “even though there will be setbacks, and false starts, and tough days – I will not waiver in my pursuit of peace.”

In my view, almost everything about the President’s speech today vindicates and reinforces the reading of yesterday’s events I advanced in my posting earlier this morning. It’s become more clear than ever that President Obama is not going to drop this issue or back down in the face of Israeli stonewalling on settlements. He’s not going to be dragged into an endless series of dead ends either.

And, it would strongly appear that he has established a framework for setting up permanent status talks that is much more advantageous to the Palestinian than to the Israeli position, especially in the passage in which he promised “to re-launch negotiations – without preconditions – that address the permanent-status issues: security for Israelis and Palestinians; borders, refugees and Jerusalem.”

Explicitly including Jerusalem as one of the core issues to be dealt with in the negotiations President Obama is promising to begin in the near future runs directly counter to Israeli positions on the status of this issue and strongly reinforces the Palestinian view that Jerusalem is a central issue that cannot be set aside or ignored. Perhaps even more than settlements, this issue will be extremely challenging for Netanyahu, especially given the attitudes of some of his coalition partners on the matter, to deal with effectively.

By emphasizing the importance of Jerusalem to the upcoming permanent status negotiations, President Obama has greatly strengthened the Palestinian negotiating position and, in effect, sided with it against the Israeli stance. It’s likely that a lot of people will fail to understand the significance of this gesture, but the Israeli government and its supporters, I can assure you, will not be among them.