Mr Netanyahu is demanding not only that the Palestinians recognise the right of Israel's Jews to maintain their dominance over the country's non-Jewish minority, but also to recognise Israel as the patrimony of the majority of the world's Jews who do not live there.
Who made Netanyahu the leader of the Jewish people?
'Next, Prime Minister Benjamin Netanyahu will insist that he can't make peace with the Palestinians until they recognise the Jews as the Chosen People." That was the sarcastic tweet of one Jewish-American analyst on Israel's demand that Palestinians recognise it not only as a "Jewish state", but as "the national home of the Jewish people".
Those two phrases don't mean the same thing: only around 39 per cent of the world's Jewish population live in Israel; the other 61 per cent have freely chosen other countries as their home (more that two thirds are in the US). So, Mr Netanyahu is demanding not only that the Palestinians recognise the right of Israel's Jews to maintain their dominance over the country's non-Jewish minority, but also to recognise Israel as the patrimony of the majority of the world's Jews who do not live there.
The PLO recognised Israel in the Oslo Agreements 17 years ago; they say it's up to the Israelis to define their state. But a "Jewish state" demand openly rejects the right to full and equal citizenship of the one million Palestinians that live in Israel. That community is increasingly embattled, with mainstream Israeli leaders such as the foreign minister Avigdor Lieberman publicly arguing that their future lies not in Israel, but in a future Palestinian state - and Israeli riot police are rehearsing manoeuvres to put down protests against a population transfer.
The Israeli demand is also code for negating the rights of Palestinian refugees, whose return Israel has long rejected because it would remove the country's Jewish majority. While PLO leaders concede that a mass return of refugees is not in the cards - Yasser Arafat undertook to find a peace agreement that included "creative solutions to the right of return while respecting Israel's demographic concerns" - they still consider that to be massive concession to the Israelis, which will require reciprocation. Instead, Mr Netanyahu wants to pocket that concession even before negotiations begin.
And Israel will present a rejection of that demand as a sign that Palestinians are unwilling to make peace. "The core of the Israeli-Palestinian conflict has been the refusal to recognise Jews as a people, indigenous to the region and endowed with the right to self-government," the Israeli ambassador to the US Michael Oren wrote this week in the New York Times. "Prime Minister Netanyahu is pointing the way out of the current impasse: he is identifying the only path to co-existence."
Well, no: the Palestinian struggle, as the US president Barack Obama made clear in Cairo last year, is rooted in the fact that Israel's creation resulted in their displacement and dispossession in 1948, and in an occupation that began in 1967. Israelis appeal to western sensitivity by couching any assertion of the rights of Palestinian refugees as a threat to their security. But the Palestinians driven out in 1948 were not the authors of centuries of Jewish suffering, and their rights as human beings cannot be negated on the basis that their very existence in their original homes threatened the Jewish nationalist project in Palestine.
But Mr Oren's demand for recognition of "Jews as a people, indigenous to the region and endowed with the right to self-government" is problematic, not only for Palestinians, but also for many Jews. Israeli Jews may have constituted themselves as a nation with the right to security and self-determination, but the majority of the world's Jews have not claimed a right to self-determination as Jews. On the contrary, we're very happy that anti-Semitism in the West has been marginalised to the point that we can freely integrate ourselves into the democratic societies in which we've chosen to live.
Growing up as a Jewish anti-apartheid activist in South Africa, I was often told by white racists to "go back to Israel". The idea that Jews don't belong among non-Jews is the traditional language of anti-Semitism - and also of the modern ideology of Zionism that emerged in the late 19th century. Zionism's founder, Theodore Herzl, believed that anti-Semitism of the sort I encountered was inevitable and even "natural" whenever Jews lived among gentiles. He effectively concurred with the anti-Semites' remedy: that I should "go back to Israel".
Apartheid, by the way, denied black people the rights of citizenship on the basis that their "national homelands" were in Bantustans such as Transkei and Kwazulu - bogus "states" in which they supposedly would exercise their right to self-determination.
Jews have certainly suffered for the right to live in security and safety, but the majority have chosen to exercise that right not in a separate Jewish nation state, but instead as Americans, Argentines, British or French. When Mr Netanyahu proclaims himself not just the prime minister of Israel, but also the "leader of the Jewish people", that's an expression of an ideology that holds that we're a separate nation. I don't believe that the majority of diaspora Jews are comfortable with the idea that they're not really Americans or other nationalities, but are instead part of a separate people whose "national home" is Israel. While their grandparents' experience may have been one of Jewish persecution and impermanence, most young Jews in the West today are not assuming that their gentile neighbours are going to turn on them.
If the current distribution of the world's Jewish population changes in the coming decades, Israel's share is more likely to shrink than to grow. The Israeli government revealed in 2003 that some 750,000 Israeli Jews were living abroad. Israel's former prime minister Ehud Olmert addressed French Jews a couple of years later and implored them to send their children "home" to Israel. Ironically, his sons were living in Paris and New York at that time.
By insisting that the Palestinians declare Israel "the national home of the Jewish people", Mr Netanyahu is, in effect, asking Mahmoud Abbas to recognise a claim against which more than half of the world's Jews have voted with their feet.
As a Jew, I'll decide where to make my national home - it's not a matter that either Mr Abbas or Mr Netanyahu has any business discussing.
Tony Karon is a US-based analyst who blogs at www.tonykaron.com