Say what you want about President Barack Obama’s Middle East speech last week—that he didn’t address Jerusalem and the Palestinians’ right to return, and that he merely restated what has long been US policy in regard to Israel’s 1967 borders—at the very least the president has changed the subject, and in a positive way. Since 2009, in US-Israeli relations, most of the talk swirled around Iran. Prime Minister Bibi Netanyahu, rather than address the core issue of what a peace deal with the Arabs might look like, constantly fought to shift the discourse to Iran. In 2009 when Netanyahu visited Washington, Bibi and Barack clashed openly on that topic, too, but Netanyahu succeeded for the most part, in making Iran, not Palestine, the central issue, by making hyperbolic, alarmist comments about Iran’s nuclear program and its support for Hamas and Hezbollah. And since, whenever “Palestine” emerged as a subject, Netanyahu crossed it out and replaced it with “Iran.”

That isn’t working this time. (In his speech to Congress, on Monday, Netanyahu tried his best at Holocaust-mongering over Iran, but it didn’t resonate.) Instead, Obama has put the focus where it belongs: on Palestine, Israel’s borders and the need for a Palestinian state.

Netanyahu didn’t help his case by displaying a stunning set of bad manners. He was rude, boorish and recklessly arrogant. Pocketing the support of the Israel lobby, neoconservatives, hawks and the Republicans (including the 2012 presidential candidates), Netanyahu decided that rather than deal with the issue at hand, he’d instead play American politics, rallying opponents of Obama in a challenge to the president’s political future. That won’t work. While Netanyahu’s boisterous obstructionism might attract support from deluded Christian evangelical voters who see Israel as the path to the End Times, Armageddon and the Second Coming of Christ and from some right-wing Republicans who see Israel as the enemy of all things Muslim, he isn’t likely to find much support among American voters at large—not even from American Jews, who will once again overwhelmingly support Obama in 2012. In contrast to Netanyahu’s bullying veneer, Obama looks smart, statesmanlike and—especially—a defender of American interests.

That’s not to say that Obama will carry the confrontation with Netanyahu to its logical conclusion. On this, Obama’s record isn’t good. After appointing George Mitchell in January, 2009, Obama let Mitchell twist slowly, slowly in the wind, while putting in place officials such as Tom Donilon, the national security adviser, and Dennis Ross, the White House’s chief Middle East adviser, who teamed up against Mitchell and against other US officials who believed that a settlement of the Israel-Palestine conflict is an urgent requirement for preserving what’s left of America’s declining influence in the region. (At a recent dinner hosted by the Washington Institute for Near East Policy, a pro-Israel think tank founded by AIPAC, an attendee assured me that Donilon insisted that Ross join the White House staff after he found his tenure as the State Department’s “Southwest Asia” specialist untenable.)

But by raising the issue of Israel’s borders, Obama has finally brought the focus of Middle East policy where it belongs.

Prospects for peace, and for talks, are bleak. Not surprisingly, the Arab and Palestinian reaction to Netanyahu’s blustery statements in the United States are negative, with a spokesman for President Abbas calling his speech to Congress a “declaration of war,” and Abbas himself saying that the Palestinians will go ahead with their plan to go to the United Nations in search of international backing for a Palestinian state on the West Bank and in Gaza. In addition, Abbas’s Fatah isn’t going to listen to advice from Netanyahu about breaking the recently signed accord with Hamas. “We said in the past and we still say that our choice is negotiation, negotiation and nothing but negotiation. But if nothing happens by September we will go [to the UN to ask for recognition by its 192 member states]. Our aim is not to isolate [Israel] or to de-legitimize it. It is not an act of terror and not a unilateral act,” said Abbas.

Sitting in the Oval Office last week with Obama, Netanyahu lectured the president, mugging for the cameras. It was an unseemly performance, and the image of that moment—combined with the images of Netanyahu’s speech to Congress, joking, smirking, leaning on the podium with his elbows—only served to reinforce the impression that he is thuggish and uncompromising. (In Israel, polls show that more than half of Israelis believe that Netanyahu should have endorsed Obama’s formula for 1967 borders plus agreed-upon land swaps.) By asserting, to thunderous applause from Republicans in Congress and from craven, AIPAC-influenced Democrats, that Israel would never give up its settlements, would retain forces in the occupied Jordan Valley, never accept Palestinian refugees’ rights, and demand that Palestinians endorse Israel as a “Jewish state,” Netanyahu created a set of preconditions—and there were others, too—that no Palestinian leader can accept as the basis for negotiations.

If Obama cares to, he can corner Netanyahu now. The international community will support him across the board, and he can roll over Republicans such as Michelle Bachmann, Newt Gingrich and Mitt Romney, if they object. The stage is set.

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