Poor old Bibi was being wildly misquoted on the basis of the normal level of exaggeration you would expect from a politician playing to a particular gallery.
If you read the actual text of his recent speech, you can see it was just a bit of hyperbole not central to anything. You also get this bit of poetry:
The sixth lie is that the reason we have this increase is not only a surge in settlements, it’s the stagnation in the peace process.
Well, some of the worst terrorism that Israel has experienced in its history occurred when the peace process was at its peak.
We’ve had terrorism when there was a peace process. We’ve had terrorism when there was no peace process.
We’ve had terrorism when there was an Israel. We’ve had terrorism when there was no Israel.
We’ve had terrorism when there were settlements. We’ve had terrorism when there were no settlements, when we didn’t even control Judea and Samaria.
The real reason we have this terrorism is not because the terrorists are frustrated in the peace process. They’re frustrated because there’s a State of Israel and that frustration will continue.
Even though we'll have to mark him down for the slight contradiction about there being terrorism (by Arabs against Jews, presumably) before the State of Israel existed, and then saying that terrorism will continue as long the State of Israel exists.