Prime Minister Binyamin Netanyahu blew his chances of diffusing tensions with the United States long before he made last night's speech. True, the speech didn't help. His reluctant and unconvincing acceptance of the need for Palestinian statehood - he still could not bring himself to say the magic words "two states for two peoples" - does not bode well for future negotiations. Just as importantly, Netanyahu's failure to announce a settlement freeze clashes directly with President Barack Obama's clear call in Cairo that "it is time for these settlements to stop." Netanyahu had the worst of all worlds last night. He annoyed right-wing Likud MKs and his right-wing coalition allies by accepting, even very hypothetically, the future existence of a Palestinian state while failing, as a counterbalance, to win Washington's approval for his new stance. Unlike his two predecessors, Ehud Olmert and Ariel Sharon, Netanyahu has no credit with the American president that can be spent on settlement expansion, and Obama has put the emphasis for now on settlements, not a demilitarized Palestinian state. Given his rejection of Obama's stance, one wonders exactly why Netanyahu felt the need last week to call the American president to give him a heads-up on the speech. The photograph of the phone call pointedly released by the White House, with Obama's feet stretched out on his desk, underlines the fact that this is not an American president who feels the need to jump to attention every time Netanyahu wants to relay a message. Symbolism is important in diplomacy. Just as Obama carefully chose Cairo as the location for his first major speech on the Middle East and failed to stop over in Israel on his first visit to the region so as to push home the point that Israel is not calling all the shots in terms of America's relations with the countries of this region, Netanyahu's choice of Bar-Ilan University, the flagship of the national-religious educational sector and the institute where Yitzhak Rabin's assassin was educated, as the location of his first major foreign policy address was also loaded with meaning and hinted as to what was to come in his speech. SO WHAT should Netanyahu have done? First of all, he should not have waited so long before outlining his positions. In any negotiations, the side that first puts its proposal on the table at least ensures that its agenda is the one that is initially discussed. Instead, Netanyahu wasted his honeymoon period by doing nothing, even when he knew full well that Obama was not going to follow George W. Bush's policy of ignoring Israel's failure to meet its commitments to the road map. Before his election, Netanyahu talked of improving the economic life of the Palestinians as part of an attempt to build a peace process from the bottom up, but by failing to act immediately, the prime minister allowed himself to be dragged on to unfavorable diplomatic territory. Last night's talk of joint Israeli-Palestinian enterprises harnessing the power of the sun sounded like a poor imitation of Shimon Peres. Like Yitzhak Shamir, probably the worst prime minister in Israel's history, Netanyahu is allowing Israel to become enmeshed in an argument with Washington that endangers Israel's most vital interests. The "natural growth" of the settlements will not determine Israel's future well-being. If Israel is to survive as a Jewish, democratic state, it has to divest itself of control of the West Bank while ensuring that the new Palestinian state will not become an existential threat. Such an outcome can only be achieved through careful and honest negotiation, not only with the Palestinians but the wider Arab world, backed with the guarantee of international support for Israel's security. The alternative is for Israel to become a pariah state, increasingly threatened by its neighbors. Frittering away US and western support for Israel over the issue of a few houses here and there in the West Bank is irresponsible in the extreme. and Netanyahu's speech last night failed to remove this issue from the table. Yes, the right-wing members inside the Likud and Habayit HaYehudi would be up in arms over any Israeli commitment to freeze settlements but given that this government, with its large majority, is only a few months into its four-year term not even the most ideological of Netanyahu's opponents inside his coalition would seriously consider attempting to bring it down just now, and certainly not over one speech. By failing to offer a convincing vision last night, Netanyahu, like Shamir after the First Gulf War, is going to find himself being dragged by the United States into a Middle East peace process he does not want, and in which he is viewed with suspicion by all sides. With Obama anxious to tackle the conflict between the western world and radical Islam, made even more important following this weekend's election results in Iran, Netanyahu should have showed his willingness to play his part in helping move the peace process forward with a clear suggestion for breaking the current impasse and not just a list of preconditions the Palestinians must fulfill. His refusal to do so will prove costly to Israel in the months to come. The writer is a former editor-in-chief of The Jerusalem Post.