This is great and all, but it doesn't mean too much if Biden doesn't actually care to correct course. There have been plenty of protests already showing the current policy is increasingly opposed by significant sections of the population, yet they're only making the most token efforts at any sort of real change in their stance towards Israel. If tens of thousands of people turning out for protests on the matter don't get it through the heads of Biden and other Democrats that this stance is untenable, I don't see why we should expect he'll suddenly start listening for a few staffers sending a stern letter.
In all likelihood, they'll hold the line on this, then when Democrats lose the next elections, they'll blame it on racists, antisemites, more leftist candidates spoiling their chances, or literally anything but doing some reflection and realizing some of their long-held positions are now deeply unpopular with a significant portion of their voter base.
How has moving more to the right been working for them? They need to realize already that they're out of touch with much of their voter base. Maybe they don't run more progressive candidates in purple states as a strategic call, but they could try something new in more liberal cities, at least, and start moving the conversation. I can't be the only one where my primary options straight up suck. Oh, yeah, change things from within, where I have Corporate Democrats #1 and #2, running along with the Working Families Party candidate whose only concession is something weak like "Maybe we should increase EBT eligibility, but means test the hell out of it so it's a full time job to manage your application."
The current Democratic party basically claims to represent everyone to the left of Mussolini at this point, and that's too big a group to be a functional political unit. Unfortunately, we're basically screwed on a third party being viable, as it would depend on the two current parties taking action to change voting procedures in a way that could only hurt them. Democrats and Republicans are both content to sit on their hands right now, as they know that no matter how unpopular they may be, how badly they might lose elections, it's only a matter of time before the other guys piss people off enough and the pendulum swings back to them.