No agreements came out of the Madrid talks and elections brought new leaders to power in Israel and the United States. Shortly thereafter, Israelis and PLO officials began secretly negotiating in Oslo and ultimately reached an agreement to give the Palestinians self-rule in Gaza and Jericho to be followed by autonomy in other parts of the territories. Under the Oslo agreement, Israel and the PLO recognized each other in an exchange of letters between Arafat and Prime Minister Yitzhak Rabin.
On September 13, 1993, the Declaration of Principles between the Israelis and Palestinians was signed in Washington, D.C. The following year, Arafat was awarded the Nobel Peace Prize along with Shimon Peres and Yitzhak Rabin.
The price of Israeli recognition of the PLO amounted to Arafat’s seemingly total capitulation to Israeli demands: recognition of Israel, renunciation of terrorism, and a promise to revoke the provisions of its covenant that call for the destruction of the Jewish State. Israel’s concession was that it legitimized the PLO on the basis of its words without first testing to see that its deeds were consistent with them.
One important reason for Arafat’s shift was the collapse of the Soviet Union. The end of the Cold War eliminated a major source of financial and political support for the Palestinian cause. The PLO’s financial problems did not reach crisis proportions, however, until the Gulf War, when Arafat’s decision to support Iraq alienated its benefactors in the Gulf, notably Saudi Arabia and Kuwait. The lack of money put constraints on the PLO’s activities, in particular its ability to provide benefits to Palestinians whose loyalty to the organization was largely a result of these payoffs. In addition, Arafat came under increasing criticism for mismanagement and corruption.
While the PLO’s resources were declining, Islamic fundamentalists were growing in power, particularly in the Gaza Strip. “Moderate Palestinian” leaders in the territories, such as Faisel Husseini, also were becoming increasingly influential at Arafat’s expense.
The intifada also had proved a failure. The insurrection had generated tremendous publicity and tarnished Israel’s image in 1988-89, but the Gulf crisis erased the memories of the clashes between rock-throwing youths and Israeli soldiers. By 1992, the fiery intifada was little more than an ember that no longer attracted media attention or concerned Israeli decision- makers.
The most important factor in determining the timing of Arafat’s decision was probably the change in American administrations, which forced Arafat to give up hope that the United States would impose his conditions on Israel. While George Bush was seen as the most sympathetic president the Palestinians h
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