Prime Minister Benjamin Netanyahu  prevented Israel's law books from being stained on Wednesday by the retroactive legalization of thefts of land from its Palestinian owners, for the sake of building settlements. Netanyahu forced his cabinet to oppose a bill that would do just that, and his threat to fire anyone who voted for it indeed deterred those ministers and deputy ministers who sympathized with the settlers' struggle. Netanyahu also promised to carry out the High Court of Justice's order and evacuate Beit El's Ulpana neighborhood, thereby upholding the court's honor and preventing unnecessary international complications.

Netanyahu proved that when he wants to, he is capable of standing up to pressure exerted on him and his ministers by the extreme right. Adding Kadima to the government gave Netanyahu the parliamentary backing to show that he isn't afraid of Moshe Feiglin's faction in the Likud party, and his coalition partners on the right drew back from a confrontation that would have ended with them in the opposition.

But Netanyahu's display of leadership in the Knesset plenum was accompanied by a package of sops to the settlers outside the Knesset: The houses removed from the Ulpana neighborhood will be relocated rather than being destroyed; the defense minister's authority to approve construction in the territories will be transferred to a ministerial committee controlled by Likud; 300 new apartments will be built in Beit El; and a legal mechanism will be created "for defense against future lawsuits" - a laundered term for legalizing the theft of lands from Palestinians.

If these promises are kept, the settlers and their political supporters will get what they wanted, even without the passage of special legislation. The land theft will continue, the settlements will expand, and the two-state solution will be foiled.

Thus while Netanyahu seemingly displayed leadership and spoke of respecting the court's decisions, he actually paid protection money to the extreme right. His public pledge to "strengthen the settlements," and to repay in kind those left-wingers "who think they are using the legal system to weaken the settlements," places Netanyahu in the same camp as Feiglin and National Union MK Michael Ben Ari.

Instead of bowing and scraping to the settlers, Netanyahu should return to the diplomatic course he charted in his speeches at Bar-Ilan University and to the U.S. Congress: He should strive for the establishment of a Palestinian state alongside Israel.