He basically says the same thing here (youtube), way back in April.
Some think this means that Obama was dictating that in order for there to be any peace, Jerusalem must remain undivided. I'm surprised I have to point this out, but the President of the United States is not a party to the negotiations which will resolve such issues. That's between the Israelis and Palestinians. We may act as a mediator, lubricating the flow of events, but the views of our President don't determine the possible actions of soveriegn nations when deciding internal issues.
Once again, this may be explained by the fact that the Republicans have been living in a reality that they themselves create for so long. This works very well for embedding loyalty into your followers, but when the real world starts butting up against their constructed reality, they are at a disadvantage... and wars are started as a result. A small price to pay.
In this particular case, the Republicans have been playing games with the word "sovereignty" for so long that they have forgotten what it means. Iraq has an army of occupation on its streets. It is not sovereign. The parties to the Israeli Peace Talks, however, must be sovereign if they are to have any chance at success. If they are truly sovereign entities, then our President can take his personal views and go hang.
For the record, here is Obama's so-called flip-flop:
Judge for yourself.
"Jerusalem is a final status issue, which means it has to be negotiated between the two parties" as part of "an agreement that they both can live with."
"Two principles should apply to any outcome," which the adviser gave as: "Jerusalem remains Israel's capital and it's not going to be divided by barbed wire and checkpoints as it was in 1948-1967."