The Prime Minister responded to President Obama's Cairo speech by endorsing a circumscribed Palestinian state. The conditions he imposed on acceptance of that state were those endorsed by the overwhelming majority of the Israeli public, as well as, by the parties to the left of the Likud. In the short term, the speech represents a political success for Netanyahu, as he managed to improve relations with the U.S. while simultaneously keeping his governing coalition intact. However, relatively soon Netanyahu will have to make a decision regarding the actual dismantling of illegal outposts that will probably require him to make a choice between the stability of his government and the quality of Israel's relations with the United States. The most obvious way around this dilemma is the creation of a national unity government in Israel, which Netanyahu called for in his speech.