The identity may be derived from the interesting fact that
$$\left ( \begin{array} \\ 1 & 1\\1 & 0 \\ \end{array} \right ) ^k = \left ( \begin{array} \\ F_{k+1} & F_k\\F_k & F_{k-1} \\ \end{array} \right ).$$
From this, we may observe that
$$\begin{align} \left ( \begin{array} \\ 1 & 1\\1 & 0 \\ \end{array} \right ) ^m \left ( \begin{array} \\ 1 & 1\\1 & 0 \\ \end{array} \right ) ^n &= \left ( \begin{array} \\ 1 & 1\\1 & 0 \\ \end{array} \right ) ^{m+n} \\ &= \left ( \begin{array} \\ F_{m+1} & F_m\\F_m & F_{m-1} \\ \end{array} \right ) \left ( \begin{array} \\ F_{n+1} & F_n\\F_n & F_{n-1} \\ \end{array} \right )\\ &= \left ( \begin{array} \\ F_{m+n+1} & F_{m+n}\\F_{m+n} & F_{m+n-1} \\ \end{array} \right ) \end{align} $$
Therefore we can say that, for example,
$$F_{m+n-1} = F_m F_n + F_{m-1} F_{n-1}$$
Plug in $m=n$ and the desired identity follows.
EDIT
The first identity quoted above follows from putting the Fibonacci recurrence into matrix form:
$$\left ( \begin{array} \\F_{k+2} \\ F_{k+1} \\ \end{array} \right ) = \left ( \begin{array} \\ 1 & 1\\1 & 0 \\ \end{array} \right ) \left ( \begin{array} \\F_{k+1} \\ F_k \\ \end{array} \right )$$
which may be immediately verified. We may repeat this matrix multiplication $k$ times to get
$$\left ( \begin{array} \\F_{k+2} \\ F_{k+1} \\ \end{array} \right ) = \left ( \begin{array} \\ 1 & 1\\1 & 0 \\ \end{array} \right )^k \left ( \begin{array} \\F_{2} \\ F_1 \\ \end{array} \right ) = \left ( \begin{array} \\ 1 & 1\\1 & 0 \\ \end{array} \right )^k \left ( \begin{array} \\1 \\ 1 \\ \end{array} \right )$$
Noting that $F_{k+2}= F_{k+1}+ F_k$ and $ F_{k+1} = F_k + F_{k-1}$, the stated identity follows.