the reason he cowers to the settlers is he does not want his government to collapse and be on the opposition benches. he also has the task of pretending to the americans and the rest of the world that he is ok with a 2 state solution. he cannot deliver this because he understands because of neglect and cowardice of israeli leaders the settler sympathisers have infiltrated the idf and other organizations and are ready to start a civil war if any israeli goverment withdraws from the west bank. so everything he does is to dodge having to make a peace deal which will result in a civil war. barak knows this too and that is why he is playing the same game.
Woman wounded by stones thrown toward her car near Jerusalem (Haaretz)
from the article: What Netanyahu really thinks about settlements