Somehow, I believe that Obama knows that. It is one linchpin in resolving the problem of wider Arab-American relations and getting Islamic people on our side.
Israel doesn't want peace, it only wants the palestinians to go away somehow, and it will continue to make life hell for them till they do. If, somehow, the political elite come to their senses and realise it's not possible, then maybe a peace might be possible. but till then nothing matters and there's no point trying to create a peace which one side categorically rejects. keep to the Fen Causeway
This is a matter of national strategy and not something that can be changed.
But consider: Within a year the US will be facing bankruptcy and finding it very hard to provide major military support to its allies. This will place Israel in a new, less favorable strategic position, and unless Europe picks up the slack, Israel will find itself with less room for unilateral action.
At that point things will start to get interesting.
