Early in his administration, he tried to revive negotiations by mandating a complete West Bank settlement freeze, only to be forced embarrassingly by Israeli Prime Minister Netanyahu to back down. When this past May he had the temerity to publicly tell the Israelis that their current policy towards the Palestinians is untenable and unsustainable, and to modestly suggest a negotiating formula to break the impasse, he was publicly chastised by Netanyahu and had to submit to the humiliation of seeing the Congressional leaders of his own party repudiate him in favour of the Israeli prime minister.
In response, though he cannot admit it, Obama has washed his hands of the Palestinian issue. He knows he can do nothing more. And yet, the issue will not go away.
Now, once again, he is being forced to publicly support an Israeli policy position fundamentally opposed to his own. He knows fully well that Netanyahu has no intention of permitting formation of a viable Palestinian state, and that the Palestinians have little choice but to pursue their current course at the UN.
He likewise understands that the US' lonely support for Israel and the inevitable US veto of the Palestinians' bid for full UN membership will undermine, perhaps terminally, the US position in a democratising Middle East, and will expose the US' nominal support for popular Arab rights as a fraud.