What is not likely to be a major sticking point in the near term is the issue that has generated the most attention in recent weeks: Israeli settlements. People close to Netanyahu believe that the highly publicized spat has been overblown, and any differences with the Obama administration will soon be resolved.

Most important was the impact the speech had on Netanyahu’s political standing inside Israel. Improbably, he garnered praise from the right and left; his approval skyrocketed 16 percent overnight.

His right-wing coalition was pleased that he didn’t cave to Obama on settlements or propose a Palestinian state that would be capable of attacking Israel.

Helping him most with shoring up support from the center and the left, though, was the shockingly coarse responses from across the Arab world to Netanyahu’s insistence that Israel be recognized as Jewish. Presumably speaking on behalf of moderate Fatah leader and Palestinian Authority President Mahmoud Abbas, chief Palestinian negotiator Saeb Erekat said flatly, “In a thousand years, no Palestinian leader will accept this.”

“If they won’t accept us as a Jewish state, then when will they ever accept us?” asked Shmuel, a 70-year-old native Israeli who supported Oslo and has mostly voted for left-wing candidates. Such was the sentiment across Israel, where ordinary citizens are leery of making concessions to people who won’t even agree to their country’s right to exist.

Speculation that “peace” is now dead or hopelessly delayed misses the point. Oslo proved that a signed deal alone does not bring peace.

On the table now is the prospect of making life better for Palestinians, laying the necessary foundation for a future state that is stable and—most important—committed to peace.

For the sake of all parties, Obama should not waste this historic opportunity.