As Hussein Ibish notes at Foreign Policy, the Israeli demand that the Palestinians recognize Israel explicity as a "Jewish state" is a relatively new element among their demands, and one that, for a variety of reasons, Mahmoud Abbas and the Palestinian leadership would be foolish to embrace.
For decades, Palestinians were told to recognize Israel and renounce violence, and through their sole legitimate international representative, the PLO, they did so almost 20 years ago, even though it meant effectively renouncing claims on a full 78 percent of the country in which they had been a large majority in 1948. They did this on the understanding that it would lead, in short order, to their own independence in an excruciatingly small part of what they regard, with impeccable historical credentials, as their own country. That has not transpired and does not appear imminent. Now they are being told that they have not done enough, that this novel concept is now the defining issue, that they once again have to read from a script being handed to them by Israeli leaders, and that if they will only say the new magic words the problem will be solved.
I doubt there is a single Palestinian who does not believe that behind Netanyahu's demand lies a fundamental disinclination to agree to a truly independent and sovereign Palestinian state. Indeed, at the Knesset on May 16 and at the Congress on May 24, he insisted on a long-term Israeli military presence along the Jordan River, effectively denying this potential Palestinian state control of its own borders. This places Netanyahu squarely at odds with U.S. President Barack Obama's clear reference to a "full and phased withdrawal of Israeli military forces" from the areas to become a Palestinian state, as does his continued strong implication that he is not prepared to negotiate seriously about Jerusalem. Therefore Netanyahu's insistence that the only real issue is for Abbas to intone the incantation "I accept Israel as a Jewish state" rings exceptionally hollow.
Netanyahu's demand is an additional and quite recent complication to an already tangled knot, but it has sunk so deeply into the Israeli and pro-Israel consciousness that some sort of language to satisfy it may ultimately have to be found. Reciprocal recognition of the Jewish right of self-determination in Israel and the Palestinian right of self-determination in Palestine might well prove a requisite final flourish on a peace agreement. But expecting or demanding Palestinians to embellish their already unrequited recognition of Israel with an extremely problematic, premature, and, at this stage, politically impossible statement about Israel as a "Jewish state" (again, whatever that might mean) can only be interpreted as another, and entirely gratuitous, obstacle to peace.
I have absolutely no doubt that if the Palestinians agreed tomorrow to recognize Israel as a Jewish state, Netanyahu would seize upon some other demand as a means of delaying negotiations - secure in the knowledge that settlement construction goes on in the West Bank and East Jerusalem, and that no one is about to stop it. Netanyahu has done nothing but play for time, especially with Congress - and they are willing to give him all the time he wants.
Even after Mr. Obama's speech, then, as Rashid Khalidi wrote recently,
There is little sense in the Arab world or among Palestinians that the United States has a constructive role to play in resolving this conflict. Indeed, if anything, it has only succeeded in making itself even more of a roadblock to progress than it was before.