While the definition of "Jewish state" needs to be clarified, the point is that the Arab position has always been a bit too sly about the 2-state solution. They accept 2 states but won't accede that the Jews have a right to their state. They in essence leave themselves the option to continue the struggle against Israel on the political stage even after a 2-state agreement. Bibi is trying to pin them down on what they mean by 2-states and to ensure that a deal really ends the conflict. It may not be elegant for progressive or anti-Semitic ears, but it makes sense in the context of that conflict.
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ISIS suicide attack kills 5 militiamen in western Libya (AP)
from the article: Aluf Benn / Who will blink first as peace talks stakes pile ever higher?