The reaction to President Barack Obama's speech on Thursday has largely focused on one line: "The borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps, so that secure and recognized borders are established for both states." News outlets from across the political spectrum ran headlines highlighting Mr. Obama's demand that Israel return to the "1967 borders," referring to Israel's boundaries before it took control of the West Bank and Gaza Strip after the 1967 Six Day War.

Meantime, GOP presidential hopeful Tim Pawlenty condemned "President Obama's insistence on a return to the 1967 borders," calling it "a mistaken and very dangerous demand." Rep. Alan West (R., Fla.) described the position as "the beginning of the end as we know it for the Jewish state." The Republican Jewish Coalition deemed a return to such borders "unacceptable."

These individuals are absolutely correct that a return to the 1967 lines would be an unacceptable proposition for Israel. But Mr. Obama never said Israel should return to the 1967 lines. He said the 1967 lines with mutually agreed swaps should be the basis for negotiations. As Mr. Obama said yesterday at the annual American Israel Public Affairs Committee conference, "it means that the parties themselves—Israelis and Palestinans—will negotiate a border that is different than the one that existed on June 4, 1967." With this flexibility, Israel could incorporate, in internationally recognized borders, the vast majority of some 500,000 Israelis currently living beyond the 1967 lines. In effect, Mr. Obama met the Israeli demand that a future border reflect Israeli demographic and security concerns.

The concept of land swaps has served as the basis for every serious attempt to resolve the Israeli-Palestinian conflict in the past decade. For every piece of land beyond the 1967 lines that Israel wants to annex, it would give a piece of land to the Palestinians from within Israel proper.

President George W. Bush's 2004 letter to Israeli Prime Minister Ariel Sharon, which current Israeli Prime Minister Benjamin Netanyahu is now insisting that Mr. Obama reaffirm, is based on this premise. Mr. Obama's Thursday speech formalizes into official U.S. policy the working assumption of every U.S. president and secretary of state since the 2000 Camp David negotiations, as well as former Israeli Prime Ministers Ehud Olmert and Ehud Barak, Israel's most decorated soldier.

Since a large proportion of the Israeli settlers live in areas adjacent to and contiguous with the 1967 lines, there are multiple border scenarios that would allow Israel to annex the vast majority of Israelis living beyond the 1967 lines. The president's formulation encompasses solutions ranging from the Geneva Initiative (which brings into Israel 72% of Israelis living beyond the 1967 lines) to maps by David Makovsky of the Washington Institute for Near East Policy (which bring into Israel up to 80% of Israelis living beyond the 1967 lines).

There is a finite amount of land that would be reasonable for Israel to swap in exchange for this post-1967 territory. This land should be unpopulated, away from vital Israeli infrastructure, and should not interrupt Israel's geographic contiguity or the living patterns of Israelis. It also shouldn't be near central Israel's "narrow waist," the precariously thin strip of coastal plain—some nine miles wide—between the 1967 lines and the Mediterranean Sea. Fortunately, there is enough land within Israel proper that fits these conditions that would allow the Jewish state to include the vast majority of Israelis living beyond the 1967 lines, as well as to address Israeli security concerns.

By insisting that the 1967 lines be modified, Mr. Obama showed his paramount concern for Israel's security. "Every state has the right to self-defense, and Israel must be able to defend itself—by itself—against any threat," Mr. Obama said. Furthermore, he went beyond Mr. Bush's 2004 letter to Mr. Sharon by demanding a non-militarized Palestinian state, and conditioning Israeli withdrawal from any post-1967 territory on the demonstrated effectiveness of security arrangements.

He also shared Israel's fears about Hamas's participation in the Palestinian government, legitimizing Israel's reluctance to "negotiate with a party that has shown itself unwilling to recognize [Israel's] right to exist." And by insisting that Israel be recognized as "a Jewish state and the homeland for the Jewish people"—meeting another Netanyahu demand—Mr. Obama effectively renounced any return of Palestinian refugees to Israel.

Based on the simplistic media coverage, it's easy to miss the distinction between "return to the 1967 lines" and the president's actual formulation of "based on the 1967 lines with mutually agreed swaps." The truth is that the president's vision ensures that Israel can remain a Jewish and democratic state, include within internationally recognized borders the vast majority of Israelis currently living beyond the 1967 lines, and keep its citizens safe.