In his remarks, Netanyahu chose the consensus option. He repeated Obama's rhetoric that the final status agreement would not be the same as the 1967 borders, and added his own rhetoric that those borders were indefensible. Obama left enough rhetorical space in his speech to AIPAC Sunday for Netanyahu to crystallize and end the petty spat, and Netanyahu wisely did so. In the future, Prime Minister Netanyahu may be more careful about his reactions to Obama's policy speeches, which will serve both the US and Israel well.
But Obama's win is only an ends in and of itself. Netanyahu diplomatically bowed out of the argument, only to capture American public support. He will return back to Israel showing that he can rally the Americans behind government policy and behind the State of Israel. While the Israeli press will point out the distinction between his approval rating in the US versus at home, the fact remains that Netanyahu is in a stronger position now than before leaving on his trip to Washington.
It is beyond clear, however, that between the President of the United States and the Prime Minister of the State of Israel, both AIPAC's constituency and the United States Congress as a whole overwhelmingly prefer Netanyahu. The Republican party would kill to have a candidate like Prime Minister Netanyahu for the 2012 election. In particular, Netanyahu's statement, "It took me a while, but eventually I learned, there is an America outside the beltway," was a brilliant use of rhetoric indicating that the Prime Minister is deeply in touch with American frustration with the federal government. As always, Netanyahu proved that his political savvy is never ever to be underestimated.
But Congress's reaction seriously undermined the legitimacy of US efforts to be seen as an honest broker in the Middle East at a time when its reputation is both critical and the subject of hyper-sensitive scrutiny. Even in the rare instances where Prime Minister Netanyahu pointed out the benefits of peace to Palestinians, such as the return of some refugees to the West Bank, the Congress was silent. Applauding these lines would have been at least a thinly veiled attempt at giving due diligence to the American Muslim community, Palestinian-Americans, and those Americans who support a solution to the Palestinian refugee issue. It would have had no negative resonance in the American Jewish community to applaud the benefits of peace to Palestinians. But enough members of Congress chose pandering over pragmatism to irrevocably damage US efforts to effectively posture itself in the region.
Congress's reaction will severely constrain President Obama's ability to garner European support behind a US veto of UN recognition of a Palestinian state. Perhaps even more consequential, the Arab street will perceive America as having failed to adapt to the new realities on the ground in the Middle East. This bodes poorly for American engagement in the Middle East, and the extent to which the newly liberated Arab publics will trust American policy and commitments in the region.