Paradoxically, this may make him a better president from Israel's perspective.
In the past forty years, only one Israeli territorial concession has paid off - the Camp David accords with Egypt. Even though that peace agreement did not bring anything approaching real peace, and Egypt got by far the better end of the deal (tens of billions in aid to prop it up plus the Sinai without having to normalize relations with Israel) it did result in a pretty quiet, long border and much less pressure on Israel's defense force.
But every other territorial concession for "peace" has brought more bloodshed: the withdrawal from southern Lebanon, Oslo, Gaza.
What did these events have in common?
They all occurred with American backing while a president was in the White House who was emotionally pro-Israel.
Hillel Levin just wrote an interesting article enumerating how Bush's presidency has been bad for Israel. While I would disagree about some of his points, to an extent what he is saying is true, and he has one paragraph that is critical to understanding why Zionists love Bush - and Bill Clinton:
So why, exactly, do Israelis love Bush so much? Actually, it isn't that difficult to understand. From the perspective of an Israeli, Bush is a true friend. Israelis live in a tough neighborhood, surrounded by states and movements that expressly seek the destruction of Israel. And here we have President Bush, the leader of the strongest country in the world, declaring himself an unabashed ally of Israel. Indeed, there's no reason to question Bush's sincerity on this point: he really does care about Israel's security. So Israelis can be excused for putting aside the content and effects of his policies and for appreciating his steadfast rhetorical and personal support for Israel. (By the way, this explains the paradox of why Israelis love both Clinton and Bush, despite their radically different regional policies: for Israelis, it isn't about the policies.)Israelis have been so claustrophobic and isolated that a genuine friendship being offered by a world leader is a huge relief. And when these same leaders ask for concessions, Israelis act as friends do - they try to help out.
Even though the State Department has been implacably Arabist since modern Zionism began, Israelis (and, by extension, all Zionists) are willing to overlook threats to their security when a friendly president asks them nicely.
In fact, one of the major reasons that Sharon agreed to withdraw from Gaza was reportedly because he felt sure that Bush would, in exchange, allow Israel to keep much larger parts of the West Bank permanently - a faith in a single person who will be replaced soon, based on a letter that has no worth.
With Obama as President, Israel's leaders would be on guard, and would not be nearly as forthcoming. Any peace plans would be evaluated more on their merits and less on the personal charisma and genuine friendliness of the President. And on the merits alone, any further Israeli concessions for a Palestinian Arab state would require much more from the PalArab side than has ever been forthcoming.
(I hope it is obvious that this is not a reason to vote for Obama. It is a reason to vote for whomever would be better for the country, and for Israeli leaders to not let personal gratitude substitute for Israel's security - or to replace Israel's leaders with people who understand that.)
UPDATE: See Noah Pollak, whose points as far as how Bush has been towards Israel are roughly on target, but whose assumptions of where Levin's head is at seem way off base.