But there is another important implication of this speech. Netanyahu was invited to speak at the behest of the Republican Speaker of the House John Boehner (R-OH). Both speaker Boehner and House Majority Leader Eric Cantor (R-VA) have expressed that they are "honored" and "look forward" to the Prime Minister's speech.
In other words, the speech is an opportunity for Netanyahu to rally Republican opposition to the President's Middle East agenda, which will almost certainly include measures to which Netanyahu and his coalition are opposed. Giving the speech to a Republican-run House constrains President Obama politically because the speech will allow Republicans to make their opposition to settlement freezes, negotiations with the PA, and dividing Jerusalem high-visibility issues. Now that Obama has officially declared his candidacy for President in 2012, these constraints are only multiplied.
Furthermore, Netanyahu's position vis-a-vis the administration will be win-win. If he goes to the right of the administration he will strengthen his base. If he aligns with the administration he gets reconciliation. In contrast, the Obama administration is faced with the choice of alienating the moderate center which is largely traditional on Israel, or looking manipulable by the Israeli Prime Minister.
The best strategy for the Obama administration would be to reconcile now and make provisional agreements that it would tacitly conditioned on continued reconciliation. This won't stop Netanyahu from being conservative, but it may cause him to tone down his rhetoric. It also allows the administration to save face by making it clear that positions in opposition to the administration will cost Netanyahu political capital.