With the patience of a taxi driver at a red light about to turn green, the Palestinian leadership responded to Wednesday's announcement of an Israeli moratorium on new settlement building with: "It's not enough!" Prime Minister Binyamin Netanyahu's unprecedented moratorium is both substantive and symbolic - the appropriate response to a Palestinian settlement freeze demand that is both emblematic and a red-herring. THE DISPUTE between Palestinians and Israelis is not about settlements. It hinges on whether the Arabs are willing to recognize the legitimacy of Israel as the state of the Jewish people within any boundaries. Some find it convenient to imagine that the clash between the Zionist and Arab causes has transitioned to a non-zero sum game. That is hardly the dominant view in Israel. In 1920, the international community gave Britain the responsibility of establishing a national home for the Jewish people in Palestine. But a year later London turned over eastern Palestine to Emir Abdullah and Transjordan was born. The Arab response? "It's not enough." In 1937, the Peel Commission recommended dividing Palestine into Jewish and Arab states. The Zionists consented. The Arabs... said no. In 1947, the UN General Assembly voted to partition Palestine into Jewish and Arab states. Again, the Jews agreed. The Arab response was: "It's not enough" and they tried to throttle the newborn Jewish state. Israel survived while the Arabs took the West Bank and Gaza. Did they then form a Palestinian state? Of course not, because these territories alone were "not enough." In 1967, the Arabs failed to push an Israel living within the 1949 Armistice Lines into the sea and the West Bank came into Israeli possession. Magnanimous in victory, Israel offered peace. The Arab response? "No peace, no recognition, no negotiations." In 1977, Egypt's Anwar Sadat courageously embarked on the path of peace. Israel withdrew from all territory claimed by Egypt, and Menachem Begin, moreover, offered the Palestinians something they had never enjoyed - autonomy. Israeli forces would have been re-deployed as a prelude to final status negotiations. The Arab response? "It's not enough." As a result of the 1993 Oslo Accords, the PLO leadership was invited to return from Tunis and set up a Palestinian Authority in the West Bank and Gaza. But a double-dealing Yasser Arafat never genuinely embraced this historic opportunity for reconciliation. Hamas intensified its terror campaign which claimed dozens of Israeli lives (well before the Baruch Goldstein Hebron massacre in February 1994). Ehud Barak twice - at Camp David (July 2000) and at Taba (January 2001) - offered Arafat a Palestinian state accompanied by extraordinary territorial and political concessions. The Arab response? "It's not enough." When Israel unilaterally pulled its settlers and soldiers out of the Gaza Strip in 2005, the Arabs again said: "It's not enough." In 2008, Ehud Olmert offered Mahmoud Abbas 93 percent of the West Bank, plus additional territory from Israel proper. Abbas did not even deign to say "It's not enough" - he just walked away. Then in June of this year Netanyahu, following in the footsteps of his predecessors, unequivocally accepted a demilitarized Palestinian state. The Arab response? "It's not enough." Generation after generation, decade after decade, Israeli concession after concession, the Palestinians have never missed an opportunity to say, "It's not enough." SO now the question is what will America do? Special Envoy George Mitchell reacted with sparing approval to Netanyahu's moratorium. "It falls short of a full settlement freeze, but it is more than any Israeli government has done beforeâ€¦" He then diluted this faint praise by coldly reiterating: "America does not accept the legitimacy of continued Israeli settlements." A slightly more positive reaction came from Secretary of State Clinton who acknowledged that "agreed swaps" should be part of negotiations based on the 1967 lines. To take additional risks for peace, Israelis must feel secure that the Obama administration wholly backs the 1967-plus formula. Washington needs to cajole Mahmoud Abbas back to the table to bargain in good faith, and it should extract diplomatic gestures from its Arab allies in reciprocity for the premier's concessions. Otherwise, the discouraging message that comes across to Israelis who want an agreement is that no matter what we do it will always "fall short" with this administration and never be "enough" for the Arabs.