Its convenient for many countries to maintain the fiction that we are making slow progress to some sort of Israel-Palestine diplomatic agreement. But sometimes diplomatic fictions aren't really consistent with the needs of a democracy for openness and transparency. In this case, many Israelis, not completely groundlessly, are suspicious that the international community is pushing for the creation of a Palestinian state without peace. These suspicions were leading them to support intransigent, pro-settlement parties. Netanyahu's bit of honesty offered them enough reassurance to draw them back to the mainstream.
Of course, honesty has some cost. For example, it will be marginally easier for the fair-minded thinkers who write the Manchester Guardian to blame Israel for the inevitable lack of a peace agreement.