In his Cairo speech Barak Obama declared that Israeli settlements had to stop. The US Administration exerted a ton of political capital to make it clear that stop meant a full and permanent stop everywhere including East Jerusalem and the old city. Obama had broken away from previous understandings with Israel that while they wanted a freeze it was not realistic.
PM Netanyahu was firm in his resistance to the American pressure. Jewish settlements that were being being torn down by the IDF were immediately being rebuilt and named in honour of of the President. The end result was what the US Administration should have been aiming for in the first place. Israel would temporarily freeze new construction, allow construction already in progress to be completed and stick to previous agreements not to build outside of land already allocated for settlements. Construction could continue in Jerusalem.
Last night Hillary Clinton conceded the American position. She recognized that Israel had already made a huge concession and deserved credit. The unspoken flip side is that Israel once again got nothing in return for their change in policy. Clinton once again called for both sides to return to the negotiating table.
The reaction by the Palestinians to the Cairo speach was to make a settlement freeze a prerequisite to future negotiations. This was a brand new demand never imposed before on any other Israeli government. They thought Obama could bring them a major victory without having to give up anything in return at the bargaining table.
Once agian Obama's Nobel Prize winning strategy has backfired. The Palestinians will use this new excuse to avoid negotiations as they wait for more rewards just for showing up. Palestinians will now return to their strategy of sit back and wait until all of their demand are met, no matter how long it takes.