Just so you don't get too much of your hopes up, Netanyahu's support of a two-state solution comes with conditions that Palestinians have never accepted before and have shown no signs of accepting now. He plainly urged the Palestinians to accept Israel. "We need courage and sincerity not only on the Israeli side: we need the Palestinian leadership to rise and say, simply 'We have had enough of this conflict. We recognize the right of the Jewish People to a state its own in this Land. We will live side by side in true peace.'"
He also explicitly denied Palestinians their greatest dream: the right of some 5 million Palestinian refugees to return to what is now Israel. "Justice and logic dictates that the problem of the Palestinian refugees must be solved outside the borders of the State of Israel. There is broad national agreement on this," he said, to thunderous applause from a stage at Bar Ilan University. He also reiterated Israel's intention to keep a grip on Jerusalem, which the Palestinians also want as their capital. The Palestinian reaction was unsurprising. Said Palestinian Chief Negotiator Saib Arekat: "In a thousand years no Palestinian leader will accept this."
As pointed out in the New York Times:
“Benjamin Netanyahu spoke about negotiations, but left us with nothing to negotiate as he systematically took nearly every permanent status issue off the table,” Saeb Erekat, the chief Palestinian negotiator, said in a statement. “Nor did he accept a Palestinian state. Instead he announced a series of conditions and qualifications that render a viable, independent and sovereign Palestinian state impossible.”
And Al Jazeera:
Nabil Abu Rdainah, a spokesman for Mahmoud Abbas, the Palestinian president, dismissed the speech, saying: "Netanyahu's remarks have sabotaged all initiatives, paralysed all efforts being made and challenges the Palestinian, Arab and American positions."
Saeb Erekat, the Palestinians' senior negotiator, called on Obama to intervene to force Israel to abide by previous interim agreements that include freezing settlement activity in the West Bank.
"The peace process has been moving at the speed of a tortoise. Tonight, Netanyahu has flipped it over on its back," he said.