If an american had made those same comments in the US they would be exercising their constitutional right for freedom of speech. In Israel an Israeli is allowed freedom of speech and if that means a rabbi offends the palestinians thats his right. The arab world might not believe in freedom of speech but in Israel its a luxury thats given, To hell with Obama and the palestinians if an Israeli rabbi wants to make offensive remarks about our enemies in Israel he is entitled to. Rabbi Ovadia Yosef is not a politician, he is not saying this on the record representing the government he is saying it as an individual and whilst the arabs who feel insulted are making a big stink about it now it won't affect talks. If talks work out fine if they fail it won't be because of this statement.
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Hamas operative, 24, accused of attempting to attack soldiers on Gaza border (Haaretz)
from the article: U.S.: Rabbi's 'offensive' remarks harm peace efforts