Leading article: We should welcome this small, significant move by Israel

Benjamin Netanyahu's long-awaited speech last night was always going to be a tough call and an exercise in judicious phraseology. Under enormous pressure to respond to Barack Obama's Cairo address of 4 June, when the US President told Israel to halt all settlement expansion and recognise a Palestinian state, Israel's Prime Minister faced a dilemma. Either he risked alienating the US by accepting the Obama vision of a Middle East peace, or he faced breaking up his fragile right-wing coalition, most of whose component parts are wedded to further growth of West Bank settlements.

Mr Netanyahu, predictably, sought a middle way, possibly hoping that the offer of opaque-looking, theoretical concessions on Palestinian statehood meant he could avoid having to take action on the more practical issue of settlement expansion. Here the Israeli leader gave no concession, hailing the settlers as "pioneers" and maintaining that preventing the existing settlements' growth would be inhumane.

He also laid down a long list of very hefty conditions before Israel could even countenance a future Palestinian state; that this state would have to be entirely demilitarised; that the Palestinians would have first to "unambiguously recognise Israel as the nation state of the Jewish people", and that they also surrender their claim to a capital in east Jerusalem.

That Mr Netanyahu should recognise the future right of a Palestinian state to exist in any form at all, is, of course, progress of sorts. Hitherto, the leader of the right-wing Likud party had rejected any such notion, even in theory, insisting that Palestinian grievances should be addressed primarily through the improvement of their economic prospects.

Thus, a change in vocabulary has taken place, even if it has been wrung out of him by Israel's pressing need not to alienate the White House by appearing indifferent to President Obama's drive for a permanent Middle East peace.

Yet, many – not only in the Arab world – will wonder whether this apparent conversion on Mr Netanyahu's part is heartfelt or a tactic – a verbal concession made in the confidence that the Palestinians will never agree to write off their own history by recognising Israel as a specifically Jewish nation state and will never abandon their claim to east Jerusalem.

It is, indeed, hard to imagine even the moderate Palestinians clustered around Mahmoud Abbas surrendering either their claim to Jerusalem, or the Palestinian refugee's right of return, for the shadowy promise of a state whose future frontiers are still unknown and which will presumably lie well within the old 1967 border. Thus far, judging by his hostile remarks last night, Mr Abbas looks unimpressed.

Nevertheless, a door has been opened, albeit cautiously, and the onus now lies on Washington to ensure Israel spells out more precisely what it is offering the Palestinians - and when.

It was never on the cards that Mr Netanyahu would dump a lifetime's ideological commitment to the settler movement, overnight. No doubt he would face political annihilation were he to do so. Mr Obama has to persuade the Palestinians not to voice their disappointment in his address in too shrill a tone. Though they might not see it that way, the Israeli leader has been nudged a fraction in their direction.

Mr Netanyahu's speech was not what they, or we, hoped for, but his apparent acceptance of a Palestinian state gives something to build on. In bleak times for the Middle East, that is something.