Were Romney's remarks in Israel a gaffe? And were they true?

Romney's trip abroad has gotten much more coverage than he and his top planners probably thought it would. But working off of the old adage that no publicity is bad publicity (which is definitely not true for presidential candidates, at least those who are nominees of major parties), possibly it was intended this way. While Romney's remarks about the Olympics in London were possibly clumsy, they are unlikely to lose him votes in America. The same can be said of his remarks in Israel that culture was responsible for the difference between the Israeli GDP and the Palestinian GDP. But is the last remark true?