President Obama's speech was a bit of a let down after all the publicity that preceded it. Most of the speech related to the Arab Spring, and was probably just an attempt to enunciate a coherent policy. While Obama came out squarely on the side of civil and democratic rights for Arabs, he was unable to really enunciate a single one-size-fits-all policy for the myriad of American interests and local circumstances across the region. He devoted a total of eight sentences to the unrest in Syria and failed to call for Bashar Assad's removal as he had previously called for Kaddafi's removal. This is a recognition of reality--our forces can only take on so many dictators and nation-building projects at a time.
On the Israeli-Palestinian issue, about ten minutes out of a fifty-minute speech (go here for the text), he pronounced a few policy guidelines rather than announcing a new policy or a plan to achieve peace. His most controversial statement from the viewpoint of Israeli and American Zionists and their supporters in Congress was that the 1967 borders (really the 1949 armistice lines) should serve as the starting point for a peace deal with territorial swaps to take account of Israeli settlement blocs. Senator Mitchell went on the Sunday talk shows to emphasis the feature of mutually-agreed borders. Netanyahu predictably ignored this so as to be able to posture for the folks back home in declaring the 1967 borders indefensible. The speech, although not as detailed as the December 2000 Clinton parameters was perfectly compatible with them as well as with a 2005 Bush letter to then Israeli Prime Minister Arik Sharon, as Mitchell Plitnick points out.
Dan Fleshler declared this to be a "gutsy, principled speech"defying the Israeli government. It was nothing of the sort. It was in reality an attempt to demonstrate that Washington is still relevant to the region after the start of the Arab Spring. It was also an attempt to keep liberal Zionist groups and their supporters on board for Obama's reelection without endangering his support among Democratic and independent supporters of Israel who are more hawkish, by attempting another peace initiative. J Street, APN and Ameinu can all claim to their supporters that they are relevant and pressured Obama into acting. Meanwhile, Obama will be free to concentrate on his real priorities (the economy, Afghanistan, Pakistan, Iraq, Russia) until after the 2012 election. Call it Cairo 2009 Mark II.