President Obama’s speech delivered at the State Department laid out a vision for American diplomacy as the Arab Spring sweeps through many North African and the Middle Eastern states. The president offered U.S. support and financial backing for regional governments that implement reforms and voiced opposition to governments that are violently cracking down on demonstrators.

The overall goal of the speech was to align the United States with the Arab populist uprisings. Despite the fact that Obama’s nearly hour-long speech was predominately aimed at addressing the Arab Spring, the president’s comments on the stalled Israeli and Palestinian negotiations received the most attention.

“The United States believes that negotiations should result in two states, with permanent Palestinian borders with Israel, Jordan, and Egypt, and permanent Israeli borders with Palestine. We believe the borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps, so that secure and recognized borders are established for both states. The Palestinian people must have the right to govern themselves, and reach their full potential, in a sovereign and contiguous state,” Obama said. Obama’s speech addressed an issue that many are familiar with and support but has not been openly stated before in such a public way.

As Richard Haas of the Council on Foreign Relations expressed on MSNBC’s “Morning Joe,” “He used formulations that had never been precisely used before. He said things explicitly that people knew implicitly,” referring to Obama’s call for a two-state solution based on borders that existed before the 1967 war.

The significance of the speech is that Obama implicitly tied U.S. support for a two-state solution based on 1967 borders which U.S. officials have backed in the past. Former Presidents Bush and Clinton privately supported the 1967 borders in their talks with Israel.

But while Obama sought to align the U.S. with pro-democracy uprisings many Arab youths have yet to view the U.S. as an honest broker. The U.S. has abstained from addressing human rights abuses in Saudi Arabia and while the U.S. did eventually agree to participate in the Libyan no-fly zone, the Obama administration has been noticeably silent on the Assad regime in Syria. Addressing the fact that often strategic interests conflict with long-term goals, the U.S. will pursue the most prudent course of action and speak out against abuses by regional governments.

“Not every country will follow our particular form of representative democracy, and there will be times when our short-term interests don’t align perfectly with our long-term vision for the region. But we can, and we will, speak out for a set of core principles –- principles that have guided our response to the events over the past six months,” Obama said.

Obama’s comments on Syria represent a stark reality. Syria is not Libya. As such, the U.S. realizes that military actions are not possible given its juxtaposition to Israel and the country has yet to reach a tipping point where Western military action would be possible and/or effective.

“While Libya has faced violence on the greatest scale, it’s not the only place where leaders have turned to repression to remain in power. Most recently, the Syrian regime has chosen the path of murder and the mass arrests of its citizens. The United States has condemned these actions, and working with the international community we have stepped up our sanctions on the Syrian regime –- including sanctions announced yesterday on President Assad and those around him. The Syrian people have shown their courage in demanding a transition to democracy. President Assad now has a choice: He can lead that transition, or get out of the way,” Obama said of the Assad regime.

In his speech, Obama was attempting to address many Arabs who view the U.S. as a disinterested global power while at the same time conveying to an American audience the importance of U.S. engagement. Obama insisted that the U.S. is presented with a historic opportunity to support the many demonstrators clamoring for freedom. Further, Obama suggested that the moment calls for a “new chapter in American diplomacy.” Attempting to match words with deeds, the president announced a number of initiatives. The U.S. will launch new trade partnerships in the region and encourage the International Monetary Fund and the World Bank to assist Egypt and Tunisia in securing loans.

“We’ve (U.S.) asked the World Bank and the International Monetary Fund to present a plan at next week’s G8 summit for what needs to be done to stabilize and modernize the economies of Tunisia and Egypt. Together, we must help them recover from the disruptions of their democratic upheaval, and support the governments that will be elected later this year. And we are urging other countries to help Egypt and Tunisia meet its near-term financial needs,” Obama emphasized. Obama announced that the U.S. would cancel upwards of $1 billion in debt owed by Egypt and the U.S. will guarantee upwards of $1 billion in borrowing through the Overseas Private Investment Corporation.

But it was the president’s call for pre-war 1967 borders when addressing the Israeli-Palestinian peace process that could prove to be the most complicated. However, in diplomatic terms, calling for such a negotiated settlement lays the groundwork for potential negotiations between the Israelis and the Palestinians, with the U.S. inevitably acting as the go-between.

With the recently announced power-sharing agreement between Hamas and Fatah, this will undoubtedly make any negotiations with the Israelis next to impossible. Hamas has yet to denounce terrorism and Israel refuses to negotiate with them. Obama implicitly referred to the fact that Hamas has been unwilling to recognize Israel’s right to exist. According to the president, “In the weeks and months to come, Palestinian leaders will have to provide a credible answer to that question.”

Reaching a power-sharing agreement between Hamas and Fatah, while a positive development for Palestinians, complicates further negotiations.

While publicly calling for borders based on pre-war 1967 borders was a significant shift in U.S. policy, this has further strained relations between the U.S. and Israel. In meeting with President Obama on Friday, Prime Minister Benjamin Netanyahu reiterated that renewed negotiations with the Palestinians are unlikely. Specifically, the prime minister reaffirmed Israel’s opposition to returning to 1967 borders and negotiations with the Palestinians that would include Hamas.

In an effort to address Israeli concerns about its own security, Obama commented publicly during his meeting with Netanyahu, “Our ultimate goal has to be a secure Israel state, a Jewish state, living side by side in peace and security with a contiguous, functioning and effective Palestinian state…Obviously, there are some differences between us in the precise formulations and language, and that’s going to happen between friends.”

Despite the comprehensive nature of Obama’s State Department speech, it did fail to address certain obvious facts about the stalled Israeli-Palestinian peace process. Namely, the fate of Jerusalem or the right of return for Palestinian refugees.

However, the speech has been viewed as a positive development by an administration that wades very cautiously into divisive and problematic issues. The underlying difficulty with resolving the Israeli and Palestinian divide is that both sides have to want peace more than the Obama administration does and both sides will have to compromise in order to achieve that goal.