Bush wrote Sharon:
As part of a final peace settlement, Israel must have secure and recognized borders, which should emerge from negotiations between the parties. … In light of new realities on the ground, including already existing major Israeli populations centers, it is unrealistic to expect that the outcome of final status negotiations will be a full and complete return to the armistice lines of 1949.
Clearly, Bush's letter can be interpreted in various ways, including an invitation to consider the land swaps Obama anticipates. More important, Obama's formulation is precisely the same as that of Secretary Rice, who stipulated the 1967 border when she kicked off negotiations between Ehud Olmert and Mahmoud Abbas three years ago. Those negotiations broke down over the extent of the swaps, not over the principle of using the 1967 border, which Netanyahu now rejects.
As to whether the border would be "indefensible," perhaps it is best to listen directly to how President Abbas conceived of a deal when I spoke with him in Amman on January 21. Much has transpired since then, but I suspect that any reasonable person, listening to Abbas stipulate in his own words the suggestions, claims and conditions he put to Olmert, will doubt Netanyahu's effort to discredit the 1967 border or Abbas as a negotiating partner. You can listen to the entire interview here.