I refer you to this post of mine earlier in this thread (wait a bit for it to load to the specific post):

http://www.mudcat.org/thread.cfm?threadid=71709&messages=210&page=4&desc=yes#1229306

...and the full version:

http://www.spectacle.org/0601/israel.html

...and to these points in particular:

The Oslo Agreement

57.The Oslo Agreement had positive and negative qualities.

58.On the positive side, this agreement brought Israel to its first official recognition of the Palestinian People and its national leadership and brought the National Palestinian Movement to its recognition of the existence of Israel. In this respect the agreement (and the exchange of letters that preceded it) were of paramount historical significance.

59.In effect, the agreement gave the National Palestinian Movement a territorial base on Palestinian land, the structure of a "state in the making" and armed forces-- facts that would play an important role in the ongoing Palestinian struggle. For the Israelis, the agreement opened the gates to the Arab world and put an end to Palestinian attacks --as long as the agreement was effective.

60.The most substantive flaw in the agreement was that both sides hoped to achieve entirely different objectives. The Palestinians saw it as a temporary agreement paving the way to the end of the occupation, the establishment of a Palestinian State in all the occupied territories. On the other hand, the respective Israeli governments regarded it as a way to maintain the occupation in large sections of the West Bank and the Gaza Strip, with the Palestinian self-government filling the role of an auxiliary security agency protecting Israel and the settlements.

61.Therefore, Oslo did not represent the beginning of the process to end the conflict but, rather, another new phase of the conflict.

62.Because the expectations of both sides were so divergent and each remained entirely bound to its own national "narrative", every section of the agreement was interpreted differently. Ultimately, many parts of the agreement were not carried out, mainly by Israel (the third withdrawal, the four safe passages, and others).

63.Throughout the period of the "Oslo Process" Israel continued its vigorous expansion of the settlements, primarily by creating new ones under various guises, expanding existing ones, building an elaborate network of "bypass" roads, expropriating land, demolishing houses and uprooting plantations etc. The Palestinians, on their part, used the time to build their strength, both within the framework of the agreement and without it. In fact, the historical confrontation continued unabated under the guise of negotiations and the "Peace Process", which became a proxy for actual peace.

64.In contradistinction to his image, which became more pronounced after his assassination, Yitzhak Rabin kept the conflict alive "in the field", while simultaneously managing the political process to achieve peace, on Israeli terms. As he was a disciple of the Zionist "narrative" and accepted its mythology, he suffered from cognitive dissonance when his hopes for peace clashed with his conceptual world. It appears that he began to internalize some parts of the Palestinian historical narrative only at the very end of his life.

65.The case of Shimon Peres is much more severe. He created for himself an international image of a peacemaker and even designed his language to reflect this image ("the New Middle East") while remaining essentially a traditional Zionist hawk. This became clear in the short and violent period that he served as Prime Minister after the assassination of Rabin and, again, in his current acceptance of the role of spokesman and apologist for Sharon.

66.The clearest expression of the Israeli dilemma was provided by Ehud Barak who came to power completely convinced of his ability to cut the Gordian knot of the historical conflict in one dramatic stroke, in the fashion of Alexander the Great. Barak approached the issue in total ignorance of the Palestinian narrative and with disrespect to its importance. He presented his proposals as ultimatums and was appalled and enraged by their rejection.

67.In the eyes of himself and the Israeli side at large, Barak "turned every stone" and made the Palestinians "more generous offers than any previous Prime Minister". In exchange, he wanted the Palestinians to sign off on "an end to the conflict". The Palestinians considered this a preposterous pretension since Barak was effectively asking them to relinquish their basic national aspiration, such as the Right of Return and sovereignty in East Jerusalem and the Temple Mount. Moreover, while Barak presented the claims for the annexation of territories as matter of negligible percentages ("Settlement Blocs"), according to Palestinian calculations this amounted to an actual annexation of 20% of the land beyond the Green Line.

68.In the Palestinian view, they had already made the decisive compromise by agreeing to establish their State within the Green Line, in merely 22% of their historical homeland. Therefore, they could only accept minor border changes in the context of territorial swaps. The traditional Israeli position is that the achievements of the war of 1948 are established facts that cannot be disputed and the compromise required must focus on the remaining 22%.

69.As with most terms and concepts, the word "concession" has different meanings for both sides. The Palestinians believe that they have already "conceded" 78% of their land when they agreed to accept 22% of it. The Israelis believe that they are "conceding" when they agree to "give" the Palestinians parts of those same 22% (the West Bank and the Gaza Strip).

70.The Camp David Summit in the summer of 2000, which was imposed on Arafat against his will, was premature and brought things to a climax. Barak's demands, presented at the summit as Clinton's, were that the Palestinians agree to end the conflict by conceding the Right of Return and the Return itself; to accept complicated arrangements for East Jerusalem and the Temple Mount without achieving sovereignty over them; to agree to large territorial annexations in the West Bank and the Gaza Strip and to an Israeli military presence in other large areas and to Israeli control over the borders separating the Palestinian State from the rest of the world. No Palestinian leader would ever sign such an agreement and thus the summit ended in deadlock and the termination of the careers of Clinton and Barak.