Well, the room was smaller and the applause pathetic compared to Barack Obama's speech at Cairo University, but Prime Minister Benjamin Netanyahu's speech as Bar-Ilan University has important ramifications. On the one hand, he finally accepted the idea of a Palestinian State, and called for negotiations with Arab countries. On the other, he refused to stop settlement expansion, declared Jerusalem will never be divided and demanded that the Palestinians recognize Israel as the Jewish homeland, something they will never agree to.
The most interesting idea in his speech is his call for a demilitarized Palestinian State. He's absolutely right to demand that. Palestinians will always keep wishing Israel never existed. The only way to make sure Palestine won't try to retake what it sees as its rightful territory is by making sure it is disarmed. The new state must not look like Gaza does now. I don't support Israeli control of Palestine's airspace, though. While the proximity of Gaza and the West Bank to Tel-Aviv and Ben-Gurion Airport poses a risk, I am sure there are ways to deal with the problem.