Blair insisted: "It is up to the Palestinians to choose their own leaders."
People choosing their own leaders? Naah. We can't have that. That's no way to elect a leader -- certainly not at home, and especially not abroad...
Shimon Peres, the Foreign Minister of Israel, gets the CYA award for saying the following in front of a well-known Israeli reporter who was with Mr Peres when he watched the Bush speech on television, and then recanting it the next day...
"He (Bush) is making a fatal mistake. Making the creation of a Palestinian state dependant upon a change in the Palestinian leadership is a fatal mistake. Arafat has led the Palestinians for 35 years, kept their head above the water in the international arena. No, no, you can't just brush him aside with one speech. The abyss into which the region will plunge will be as deep as the expectations from this speech were high. There will be a bloodbath."
And of course, Peres was right, even if the state of the press in Israel is such that they allow "do-overs" for public statements.
Bush has given the Israelis free reign to occupy Palestine until Arafat is no longer in power. To make matters worse, Bush is talking about making matters worse by threatening to cut off humanitarian aid to the Palestinians. There will be more bombs, more bullets, and needless death until such time as all the parties involved want to come to the table... and apparently the Israelis think that they can get a better deal. They may be right, in that they are still illegally settling Palestinian territory, but then again, they might be asking to garrison Palestine indefinitely, face terrorism indefinitely, and have their country's economy feel the burden of the conflict... indefinitely.
If you think the U.S. economy faces an economic burden due to increased security after 9/11, imagine what it must be for Israel, where people are afraid of even going out to their local restaurant. It's certainly not an economy that overseas investors would find all that attractive.
It appears that the Israeli government is cynically attaching an acceptable cost in loss of life and loss of money in the hope of getting a better deal. They're willing to take their "friends" over in the US along for the ride, in the hope that we will pick up part of the tab afterwards... and it looks like Israel is ordering the lobster.
Frankly, all of this is just not worth it, both for Israel and for us.