"Now, with respect to Prime Minister Netayanhu and the Middle East, a major bone of contention during the course of this month is going to be the potential lapse of the settlement moratorium. The irony is, is that when Prime Minister Netanyahu put the moratorium in place, the Palestinians were very skeptical. They said this doesn’t do anything. And it turns out, to Prime Minister Netanyahu’s credit and to the Israeli government’s credit, the settlement moratorium has actually been significant. It has significantly reduced settlement construction in the region. And that's why now the Palestinians say, you know what, even though we weren’t that keen on it at first or we thought it was just window dressing, it turns out that this is important to us.
What I’ve said to Prime Minister Netanyahu is that, given, so far, the talks are moving forward in a constructive way, it makes sense to extend that moratorium so long as the talks are moving in a constructive way. Because, ultimately, the way to solve these problems is for the two sides to agree what’s going to be Israel, what’s going to be the state of Palestine. And if you can get that agreement, then you can start constructing anything that the people of Israel see fit in undisputed areas.
Now, I think the politics for Prime Minister Netanyahu are very difficult. His coalition -- I think there are a number of members of his coalition who’ve said, we don’t want to continue this. And so one of the things that I’ve said to President Abbas is, you’ve got to show the Israeli public that you are serious and constructive in these talks so that the politics for Prime Minister Netanyahu -- if he were to extend the settlements moratorium -- would be a little bit easier."
Of course, Obama himself acknowledges that a settlement "freeze" only "significantly reduced settlement construction." An extension of the "freeze" is likely operate the same; it remains to be seen whether the Palestinians can be coerced twice.