I prefer to think of Netanyahu's statement as a measure of how bad Israel's relations with Arab countries were in the past, rather than how good they are now. After all, in 1947 Arab political leaders vowed to eliminate the Jewish State and many of the Jews' Arab neighbors in Palestine engaged in a spirited campaign seeking the eliminate the Jews entirely. Nowadays Israel has a firm peace treaty with two of its neighbors, two others have no current interest in pursuing war against Israel, and Israel is even building a medical school in Jordan and establishing more open trade relations with other Arab countries. Relations with the Palestinian Arab political leadership are poor, but that's still an improvement from the low-level of the 1940s, though not so good as after the 1967 liberation of the West Bank, or the early days after Oslo, when Israelis and Palestinian Arabs alike fooled themselves into thinking Arafat had changed goals, not just tactics.
