He will be seen as having solved one of the world's most intractable problems.
Of course, the solution will neither be real or lasting. The Palestinians will get a non-viable territory without the full attributes of a state...and the Israelis will be relieved of a burden (assuming the fence is effective).
This state of affairs might last for a few months, or a year, until Bush is re-elected. Then you can count of the Palestinians or other Arabs to commit an outrage that justifies re-ocupation.
The only real solution is "transfer" and the Israelis still don't have the power to do it.
If the Pally state attacks Israel, it could be 1948 all over again -- Pallies running for the River Jordan.