Israeli Prime Minister Netanyahu had an excellent response to President Obama’s major speech on the Arab world and the Israel-Palestinian conflict. But it came two days too late, and the net result is another hasbara disaster for Jerusalem.

Netanyahu said on Saturday that Obama had “shown his commitment to Israel’s security, both in word and deed,” in Thursday’s Presidential speech, adding: “We are working with the administration to achieve common goals.”

Why couldn’t he have said that on Thursday, instead of immediately rejecting Obama’s views on moving peace talks forward?

Surely Netanyahu understood that with the gaps between the Israeli and Palestinian positions as wide as they are now, the Obama speech was not going to make a practical difference. The Palestinians are determined to push for statehood at the UN in September.

The President’s effort to derail that effort was not enough to get them back to the negotiating table that they left last fall.

Why, then, didn’t Bibi call the Palestinians’ bluff by welcoming the President’s speech as a good starting point for peace talks – the Israeli leader wasn’t obligated to embrace every aspect of the speech – and put the onus on Abbas and Co. to resume discussions?

Instead, the prime minister was so quick to assert that Israel could never abide by the pre-1967 borders that he appears to the world as the stumbling block to progress.

The one explanation that makes sense to me is that Bibi wasn’t trying to persuade world opinion with his tough stance. Rather, he was playing to what he considers his most important audience: the Israeli public, and more specifically his political rivals on the right, chiefly Foreign Minister Avigdor Lieberman.

Given the premise that all Israeli politics is local, it makes sense that Bibi wanted to prove to his core constituents that he has what it takes to defy the President of the United States.

There were more than a few disturbing elements to Obama’s speech. His view of the Arab Spring was so focused on the positive intentions of the young Facebook crowd in Egypt that he did not address the growing worries over a future Muslim Brotherhood government. He made no mention of Saudi Arabia, no doubt because American support for that autocratic government did not fit the themes the president was stressing. And on the Israeli-Palestinian conflict, he made the case that discussions on Jerusalem and the Palestinian insistence on the right of return for refugees come only after the resolution of borders and security. So there would be two stages to negotiations, making Israel all the more vulnerable.

(Ari Shavit, writing in the left-wing Israeli daily Haaretz, said that in offering that sequence, “Obama presented Israel with a suicidal proposition: an interim agreement based on 1967 borders.” But Shavit concluded that the “egregious error” was “an honest mistake” on Obama’s part and can be “easily corrected.”)

That may be wishful thinking, but lost in the controversy were the many positive aspects for Israel of the Obama speech, most notably adopting Bibi’s principle that Israel be recognized as a Jewish state and that a future Palestine would be a demilitarized state. It also condemned Hamas and the delegitimization campaign, as well as the effort to establish a Palestinian state at the UN this fall. And it did not mention settlement construction.

Unfortunately, Bibi’s response – asserting that the pre-`67 borders were “indefensible” without acknowledging Obama’s reference to land swaps – echoed the famous resolution of the Arab League summit following the 1967 Arab-Israeli war. Known as “The Three No’s” – no peace with Israel, no recognition of Israel, no negotiations with Israel – they indicated to the world the Arabs’ refusal to accept the reality of a Jewish state in the region.

The final communiqué of the summit insisted on the Palestinians’ right to all of Palestine and commitment to destroy the State of Israel.

There are those who say the Palestinians’ intentions have not changed. But Bibi didn’t give the world a chance to see that Abbas and his new partner, Hamas, barely able to talk to each other, are hardly prepared to negotiate with Israel.

Bibi’s swift and blunt rejection of Obama’s plan set the two leaders on a confrontational path that only later the prime minister backed away from, saying their differences had been overblown. But first impressions last the longest, and what the White House, the international community and the media picked up on this week was that Israel is saying “no” to the U.S. plan.

The good news or bad news, depending on your Mideast politics, is that Obama made no mention of any new effort to restart the troubled and long delayed negotiations, leaving the impression that he is turning his attention to other world problems.

All the more reason why Bibi should have responded positively to the speech instead of reinforcing his image that he rather than Abbas is the Mideast’s Mr. No.