Now that's a sentence that needs parsing! (For background see here.)
The season: According to the official calendar of the State of Israel (a combination of Jewish tradition, based on a Babylonian calendar, rabbinic clarifications based on biblical notions, and modern Zionist lore) it was "Jerusalem Day," i.e., time to commemorate the June 1967 war, in the course of which East Jerusalem was taken from the Jordanians and subsequently annexed by the State of Israel (in contrast to West Bank and Gaza, which were merely brought under Israeli military occupation).
The cause: Prime Minister Netanyahu reaffirms the government of Israel's resolve to hold on to Jerusalem as the "eternally united capital of Israel," as stated in the "Jerusalem Law" of 1980.
The audience: 1,000 ultraorthodox Jews and religious Zionists assembled at the "Merkaz Harav," spiritual center of the movement founded by the first Ashkenazic Chief Rabbi of, then, Palestine ("chief rabbi" like "grand mufti" being an office created by the British), Rav Kook, and much enhanced by his son, who saw the 1967 conquest of East Jerusalem as a providential act, bringing us nearer the messianic age.
The reason (in my humble opinion): Israel's government has been (and will be) compelled to make concessions on rogue West-Bank settlements, so at least Israel's newly elected and installed right wing prime minister Netanyahu, bullied by the Obama administration, must emphasize that he won't give an inch on the question of sharing sovereignty over Jerusalem.
The claim: "Jerusalem was always ours and will always be ours."
The fallacy: Jerusalem, i.e., the municipal boundaries that constitute the current municipality of the city of Jerusalem vastly extend beyond the historical boundaries of the city. This Jerusalem is unprecedented; before 1967 and subsequent laws extending the municipal boundaries, the area now included in the city never constituted "Jerusalem." Furthermore, the notion that Jerusalem "was always ours" may be true in certain Jewish fantasies pertaining to property rights extended by divine fiat, but is certainly not true in terms of actual ownership by common political standards. The Jewish people lost sovereignty over the city to the Romans (in stages between 63 BCE to 70 CE, and completely after 135 CE), and never held sway in political terms until the modern era, and not over East Jerusalem until 1967. Even this claim of sovereignty has been internationally contested and has not been recognized by a single nation.
In short: Prime Minister Netanyahu is pandering to the religious zealots who are bound to be hit by the concessions on settlements in the West Bank that will most likely result from a strong US involvement in Middle East negotiations. To compensate for showing flexibility on settlements Netanyahu is digging in his (rhetorical) heels in the question of Jewish sovereignty over all of Jerusalem. Nothing less was to be expected.