I don't think it's safe to say Netanyahu wants peace. His actions say exactly the opposite. Or, perhaps, it's just that the kind of "peace" he wants is like the peace they have right now, where they do whatever the hell they want and there's little to no violence from the Palestinians. But that won't last forever. The generation that remembers how much the last intifada sucked will be gone eventually and then, if Israel is still ruling the Palestinians, things will blow up again. Except this time, Jews will be a minority in Israel and the territories.
But the ability of Israelis to see that continuing the occupation is remarkable. One guy (Moshe Arens) would always write in Haaretz about how they should just go ahead and annex the West Bank and give citizenship to the Palestinians through a long and selective process (I'm sure he intends one that involves deporting any of them who were vaguely involved with anything intifada-related, and any who won't swear allegiance to Israel as a Jewish state...but that's another story) because, after all, there's not that many of them - only 1.5 million in the West Bank. The thing is, his numbers came straight out of somebody's ass. There's 2.5 million Palestinians in the West Bank. I have no idea what compels the guy to live in fantasyland, but it's hardly out of the ordinary.
Also, Knight of Fools' complete lack of understanding of the conflict probably has less to do with age than with, well, just being clueless.
As to the why, world opinion seems to be sliding very hard against israel (compared to the past at least) atm and I dont think that anybody can deny that things in the middle east are at some kind of important point politically however things end up. Obama may be working on a little goodwill (or a little less badwill) from some of the locals. I cant really see him doing it for votes, possibly as a way to try to rein in Israel but that sort of thing hasnt worked in the past and whatever you think of Obama, he aint stupid.
World opinion is turning against Israel and will do so a lot more after September. Once again, the standard response to this is to cry that the world just hates Israel because the world hates Jews. No, the world used to dote on Israel. Then the world noticed that Palestinians were a thing and were like, holy shit, this country that portrays itself as a shining beacon of freedom and democracy is actually oppressing an entire other nation! It's been going further in that direction since.
Obama will still have his reps oppose the Palestinian state in the UN, though. Not because he's stupid, but because he's nutless.