To reach a peaceful solution, each side must find a way to accept the legitimacy of the other's narrative. The Israelis can never forget that had there been a Jewish state in the first half of the 20th century, there would have been no Holocaust, and had there not been a Jewish state after the Holocaust, there would have been no Jewish future. This history is the culture that affects their worldview.
Nevertheless, the Israelis must recognize the need to achieve a Palestinian state, just as the Palestinians must accept the legitimacy of the Jewish state and that Palestinian refugees will have to be resettled in that new state, the same way the Jewish refugees were settled in the new Jewish state. Obama does not help by leaving unsaid what had been stated by his predecessors: that the Palestinians who fled Israel do not have the right to return to the Israeli state but will become part of the Palestinian state.
The Israelis were fortunate that Abbas's determination to go to the United Nations rather than engage in direct negotiations with Israel brought about the opposition of the United States and many European countries. But this administration has rendered negotiations less feasible. It has nourished the higher minimum demands of the Palestinians, and these don't come close to the maximum demands that any Israeli government is capable of conceding. So a stalemate has been created.
The only glimmer of hope for resolution of the long-festering conflict is in two events that suggest at least the possibility of second thoughts by the administration: the president's U.N. speech and the willingness of the United States to veto the Palestinian Unilateral Declaration of Independence. Maybe these moves will begin to resolve the contradictions of the past. But the themes will have to be repeated if we are to see any talks on a lasting peace.