"The obvious question is, What happened? How did the Palestinians squander their 4GW victory over the Israelis? How did the Israelis arrive at a point where they essentially have no security in their own homes?
It required major efforts by peacemakers on both sides to achieve the level of confidence necessary to sign the accords. It also required major efforts by hardliners on both sides to reverse conditions to what confronts us today. In fact, it took almost seven years to go from Oslo to al-Aqsa. Over that time, hardline Palestinians took control of the Intifada and restated their goal of destroying Israel. For their part, hardline Israelis took, and continue to take, aggressive, bloody action against the Palestinians. Essentially, Israeli hardliners, in conjunction with hardline, centralized, entrenched, and out-of-touch Palestinian leadership, led their peoples to this place. They were actively assisted by radical fundamentalists on both sides.
On the Israeli side, hardliners led by Ariel Sharon and Binyamin Netanyahu consistently opposed the Oslo accords and worked aggressively worked to undermine them. Their position from the beginning was that the accords were the first step the Palestinians' ultimate goal - the destruction of Israel....
The Palestinian fundamentalists also did their part. In February and March 1996, they executed a series of suicide bombings in Jerusalem and Tel Aviv. The combination shook Israeli support for the peace accords, and Binyamin Netanyahu led Likud's return to power in May 1996. The right was now in position to further slow the fulfillment of the peace accords and consolidate Israel's hold on the West Bank....
The two sides developed an unintentional symbiotic relationship. Arafat needed. and still needs, an external enemy to retain his control. Without such an enemy, the outrageous corruption of his regime and his inability to improve the conditions of his people might well lead to his removal from power. That corruption has certainly been a major reason for his "promotion" to president and the "election" of a prime minister. However, his continued defiance of Israel and his long-term survival skills have prevented his complete removal, so far.
Similarly, if Likud were to achieve their goal of annexation of key parts of the occupied territories, they had to convince the Israeli people that the Palestinians could never be trusted. They had to convince them that despite Likud's failed policy of invading Lebanon and their failed policy in dealing with Hamas in South Lebanon, Likud still had the correct vision of the future. In short, the right-wing party had to portray the Palestinians as seeking the annihilation of Israel; that "land for peace" was a false and dangerous dream. They had to return Israeli opinion to that which existed before Intifada I."
Col Thomas Hammes, The Sling and the Stone: pp 112-117