To sensitive Israeli ears, the most interesting aspect of US President Barack Obama's references to the Arab-Israel conflict in his UN General Assembly address Wednesday were his comments on Jewish settlements. A day after he seemed to step back from his call for a total settlement freeze by using the word "restraint" in the context of Israeli settlement activity, he seemed to change direction again, saying, "we continue to emphasize that America does not accept the legitimacy of continued Israeli settlements." However, an Israeli diplomat in the US pointed out, this has been Washington's position on settlements for the past 30 years and did not represent any real shift in America's position. That the settlement line received the loudest applause of the president's speech, along with his comment that "the United States does Israel no favors when we fail to couple an unwavering commitment to its security with an insistence that Israel respect the legitimate claims and rights of the Palestinians," should not distract anyone from the interesting nuances that redounded very much in Israel's favor. For instance, the president did not call - as some in Israel had worried about - for two states along the 1967 lines, saying instead that he was calling for "Two states living side by side in peace and security - a Jewish state of Israel, with true security for all Israelis; and a viable, independent Palestinian state with contiguous territory that ends the occupation that began in 1967, and realizes the potential of the Palestinian people." Likewise, the president - unlike in his Cairo speech - made no mention of Jerusalem, other than to say it was one of the issues that would be discussed in the permanent-status negotiations. Another nuance in yesterday's address was his reference to Israel as a Jewish state, something that has been interpreted as shorthand for an appreciation that descendants of Palestinian refugees, in any future agreement, will be allowed to return to a future Palestinian state, and not to Israel. And, finally, Obama also gave voice to his exasperation with the failure of the Arab world to heed his call and make any gestures toward normalizing ties with Israel, or do anything concrete to move the diplomatic process forward. "But all of us - not just the Israelis and the Palestinians, but all of us - must decide whether we are serious about peace, or whether we will only lend it lip service. To break the old patterns, to break the cycle of insecurity and despair, all of us must say publicly what we would acknowledge in private. "The United States does Israel no favors when we fail to couple an unwavering commitment to its security with an insistence that Israel respect the legitimate claims and rights of the Palestinians. And - and nations within this body do the Palestinians no favors when they choose vitriolic attacks against Israel over constructive willingness to recognize Israel's legitimacy and its right to exist in peace and security," he said. The message was clear: it was time for the Arabs to stop saying one thing in private, and another in public, but to act publicly on what they say privately. From the government's point of view, that comment more than compensated for his remark that continued settlement construction was illegitimate.