Suppose one of the parties to a negotiation makes what could be seen as a major concession, but attaches a bunch of conditions to it that everyone knows are unacceptable to the other side. This is what Prime Minister Netanyahu's speech did by for the first time accepting the possibility of a Palestinian state, but conditioning acceptance of such a state on limiting its sovereignty. We have the choice of looking at such an offer as a sham, or as offering a real possibility of a future agreement.
Of course the opposition's initial reaction has been negative, but any mediator's job ought to be to accentuate the positive. Suddenly we have a concept that both sides now agree upon. Yes, there are still a lot of details that remain to be worked out, but Netanyahu's statement should still be treated as a major concession on one of the most fundamental issues of any future peace negotiations. If the existence of a Palestinian state is taken as a given, and if that is something that the Palestinian side has always said is important to them, then it may become possible to resolve other points of disagreement as a means toward achieving that end. Perhaps the Palestinian side can be induced to modify some of its positions on the right of return, or the status of Jerusalem, for the purpose of achieving its desired goal of a Palestinian state. Perhaps the Israeli side can be induced to agree to attach future relaxations on some of the conditions attached to Mr. Netanyahu's statement, once certain benchmarks relating to the viability of such a state, and the reduction of violence, have been achieved. The point, from a mediator's perspective, is to deal with the issues one at a time, and use any agreement on any point of contention, as a building block and an incentive to reach agreement on other points.