This is a msg for both internal and external consumption. He is lowering expectations because he has no plans for peace. The Israelis will not allow a Palestinian state until all the "good" land has been stolen, then they will impose birders and leave the bones for the palestinian people. Palestinians and Arabs know this which is why this "peace process" will continue to be a process that never lead to peace.
US rally shows support for ex-Marine held by Iran on spying charges (AP)
from the article: Netanyahu tells Israeli public: No guarantee peace talks will succeed