And it well may be literally if Hamas, as of late participant of the Paelstinian "unity givernement", has anything to say about it.
Although Obama is not the first US president to call Israeli presence in the West Bank/Judea and Samaria "occupation" or the first to endorse openly a Palestinian state the direct mentioning of the "1967 borders" is indeed a watershed. It also follows the standard MO of American diplomacy wherever it engages itself as a supposed mediator: initially feign impartiality by paying lip service to it with a couple of washed up frases, gradually insert the general direction in which the supposed "open negotiations" should be going and then drop the bombshell of what they see as a solution and imply that it's the only acceptable outcome while simultaniously shamelessly denying that you are trying to impose a solution. And if one of the sides refuses to cooperate, there will always be a torrent of abusive labels directed at it such as "intrasigent", "uncooperative", "hard-lined", uttered first by the US governement sycophants, it's ideological fellow travelers, useful idiots and, in Israel's case, plain old-fashioned Jew-haters and then, as a crescendo, by US governement spokesmen themselves. We Serbs felt it on our own skin, and still feel it.
And I'm sorry to say this but this situation is in good part of Israel's own making. For quite some time it has been putting all it's diplomatic eggs into the American basket. Israel has been declaring itself America's staunchest ally, professing undying loyalty and extolling America's values and virtues up to the point of almost elevating it to the level of idol-worship. By doing this, it has not only painted itself into a diplomatic corner but has also played right into the propaganda hands of it's enemies who have been falsely portraying it as an American client-state, or even worse, as a center from which the "Jewish conspiracy controls America". Sane voices who warned agianst such behaviour and what consequences it might have were all to often sneered at with the usual canard of "It can not happen to us". Famous last words...
What now? Israel's rejection of Obama's proposal is a foregone conclusion but it is also only the first step. The question is how does Israel cope with the inevitable Obama diplomatic onslaught afterwards? Breaking of with America completely? It would not be prudent unless there is another powerful ally waiting in the wings to take over America's place. EU? They are on board with Obama on this. Russia? Lieberman made some overtures and some of it was reciprocitated but it's not likely that anything meaningful will come out. China? It's got strong interests in Arab countries it would not want to jeopardize. India? Could be, but it's not strong enough.
Which leaves us with the option of Israel hoping that Obama is voted out of office in 2012 and a more sympathetic person replaces him. On the face of it, this seems to be Israel's best bet. Once you scratch the surface, however, a much murkier picture emerges. Leaving aside the quality of GOP candidates, the question remains whether once they get hold of the office they will transform their professed simpathy for the Jews and the Jewish state into concrete action. Will they roll back Obama's policies? It may not be as simple as it looks. A great power is a benemoth that often acts on inertia and is too proud to admit it made a mistake. Thus, it's actions become an end to itself rather then instrument of it's interests and the abstract notion of it's "credibility" becomes more important then any benefit or even damage the erroneous action might cause. There will be powerful forces in Washington who will resist any change in course Obama has set, you can rest assured on that.
And even if the new president does overcome internal opposition to the new course the question is juct how much will the restored US support be effective on the international scene. America has a lot of internal and foreing problems on it's hands as it is and it's power is on the wane it could be that it simply will not have the means to help Israel. Besides, some of the damage Obama can do might be beyond repair.
And another thing: what if Israel does throw it's lot with the GOP and Obama wins nevertheless? All of a sudden the notion that Libya is a blueprint for Israel does not seem so far-fetched after all.
As it stands now, literally all bets are off and there is no unified action which can be pointed as the solution to the situation Israel is in. It must combine elements of all the suggested courses of action above and more as well as be prepared for anything, even what it deemed as unthinkable only 24 hours ago.