What's The Worst That Could Happen?

In a recent speech in Jakarta, Indonesia, noted Kenyan and American President Barack Obama issued a statement saying that Israeli plans to build housing in the cramped Israeli capitol of Jerusalem is "never helpful when it comes to peace negotiations."  He also called on Israel to immediately recognize a Palestinian state.  Yeah, that's the same (as of yet non existent) Palestinian state that refuses to recognize the Israeli state that's been around for 62 years.  Do you wanna know what else is unhelpful to the peace process? Kidnapping, for one.  How about launching missiles at civilian areas? Assaulting motorists trying to drive home from the hospital?  That's probably worse than building homes in your nation's capitol.  It appears that Obama is not familiar with the alternative here.  What are the Israelis supposed to do? Should they all jam into one section of western jerusalem and surround themselves with enemies?  This seems eerily familiar - A huge number of Jews being told that they can only live in this certain area - let's call it a "ghetto".  Next, let's surround them with a group of people who have vowed to not stop until there is not one Jew left on their soil.  Dammit, you know, this rings a bell, but I just can't seem to put my finger on it.  Maybe Helen Thomas was right when she said that the Jews should just go back to Germany - I mean, why did we ever leave to begin with? Pardon, but I just feel like I'm missing something here.  Maybe I'm crazy, Maybe The President is right.  Seriously, What's the worst that can happen?