Hamid is correct about Mahmoud Abbas' lack of legitimacy, but he is correct about little else.
It is the lack of Abbas' legitimacy and the unwillingness of either Abbas or any other Palestinian Arab leader to make the transition from terrorism and war to reconciliation and peace which are at the core of the continuation of the Palestinian Arab-Israeli portion of the more general Arab/Muslim-Israeli conflict.
The vocal Arab opposition to the presence of Jews in the disputed territories, incorrectly and misleadingly labeled "Occupied Palestinian Territories" by Hamid, is a smokescreen and an indication of their unwillingness to move towards peace. Were the Palestinian Arabs prepared to live in peace, the presence of a relative handful of Jews in areas that would come under their control would be no more significant that the far greater number of Arabs within Israel.
Hamas' assertion "Although it has been touted as controversial, the U.S. position on settlements under the Obama administration is not new. In fact, Obama's position is in line with decades of U.S. foreign policy under both Democratic and Republican administrations" is misleading. While there has been public criticism of the construction of Jewish towns and villages, it has generally been pro-forma. The proposal of President Clinton in 2000, which would have established another state for the Palestinian Arabs but which they rejected, provided for incorporating the major Jewish communities in the disputed territories into Israel.
Similarly, the second President Bush, in a letter to then Israeli Prime Minister Ariel Sharon, acknowledged the areas of the disputed territories with large Jewish populations would be incorporated into Israel. That the Bush Administration also agreed that the "settlement freeze" called for in the Road Map would not apply to natural growth within the major blocs had been repeatedly confirmed by former administration official Eliot Abrams.
Hamid's statement "The landscape of the West Bank has been drastically altered since the 1993 Oslo Accords, which marked a commitment by both sides to a two state solution" is also false; there was no reference to a "two state solution" in the Oslo Accords and the Israeli Prime Minister at the time, Yitzhak Rabin, repeatedly expressed his opposition.
Similarly, the statement "In order to incorporate that population within its imagined future borders, Israel has built a snaking 20 feet high barrier that effectively annexes Palestinian land" is false. The security barrier was built to prevent Arab terrorists from continuing to blow up Jewish children in discotheques, shopping malls and pizza parlors. It is purely for security purposes and is not a political barrier. It annexes no land.
While Hamid falsely states "Thanks to the settlements, today Palestinians and Israelis find themselves further from peace and the basis on which that peace was imagined is rapidly eroding," it has been the refusal of the Palestinian Arabs to accept the establishment of their own state, offered in 2000 and again more recently by Prime Minister Ehud Olmert, their violation of all their basic commitments under existing agreements, most significantly the end of terrorism, incitement and inculcation of hatred, and their refusal to negotiate in good faith which has eroded the promise of peace.
Regarding Hamid's assertion " At the moment, the Obama administration maintains, at least publicly, that engagement with Hamas must be based on certain preconditions that Hamas rejects," he never mentions those preconditions, which are quite reasonable; indeed, a party which is not willing to accept those conditions (renounce violence, recognize Israel, abide by prior agreements) is obviously not a party interested in peace. (How can one trust in a future agreement with an entity that won't honor its existing ones?)
One of the most problematic aspects of Obama's focus on construction in the disputed territories is that by ignoring previous agreements between America and Israel he is undermining any confidence Israel must have in our reliability if it is to make further concessions.
One final comment on the tenet Obama articulated in Cairo, repeated by Hamid: "No system of government can or should be imposed by one nation on any other." By insisting the people living in existing Jewish villages in the disputed territories cannot even build homes for their children, he is effectively trying to impose an unwanted system of government in those areas.