Under Barak, the Israelis compromised and compromised. For the Palestinians, it was not enough.
Barak offered very few compromises.
Almost no settlements would be abandoned. Israel would control the water supplies. (Israelis have 380 litres of water per person per day, the Palestinians are allowed 70)
Israel would control external borders. The West Bank would be split up into several sections, with Israeli zones of control between each.
Israel ruled out the right of return, so all the Palestinian refugees who were born in Israel, and who own land and property there, couldn't return to claim it.
Any issues affecting both Palestine and Israel were to be decided by Israel alone, with no Palestinian say.
Israeli compromises were very very few. The Palestinians would be allowed to set up their capital in East Jerusalem. The Palestinians would recieve 95% of the West Bank, although much of that would be occupied by Israel for an unspecified period.
As a deal, it wasn't one any Palestinian leader could have sold to his people.
Then there's the fact that orthodox Jews are starting to outnumber secular Israelis. Secular israelis get about two kids per family - orthodox Jews get eight or nine. In less than 50 years, orthodox Jews will have a democratic majority. They'll then send the secular Jews out to war (since orthodox Jews are exempt from military service, because they study their holy scripture).
Orthodox Jews don't tend to work either. They are a burden Israel can't afford to keep at that sort of level.
One group inside Israel breeds faster than the Orthodox, and that's Israeli Arabs. In 50 years, the Arabs will be approaching a majority inside Israel.
On the other hand, terrorist dees took Arafat from a low level terrorist to the leader of an exiled people.
Yes, and Menachim Begin, and David Ben-Gurion, and Yitzhak Shamir, and Ariel Sharon. All of them have carried terrorist attacks, all became Prime Minister of Israel. The history of the area over the last 100 years shows terrorism works.
Why aren't Palestinians setting off bombs in Jordan though? I mean, aren't they also occupying Palestinian territory?
The key difference, and the reason that Palestinians haven't hated Jordan, is that they had similar rights to the Jordanians. In the West Bank, Palestinians have few rights. No vote, subject to military justice, reduced water supplies etc.
In Jordan, the Palestinians were given Jordanian citizenship.
Palestinians in the West Bank would jump at the chance of Israeli citizenship. Israel could end the problem overnight by annexing the West Bank and making the Arabs who live there citizens of Israel. Israeli Arabs suffer a lot of discrimination, but they are still very well off compared to the Arabs of the West Bank and Gaza.
Israel can't do that of course, because it would mean the Palestinians would have equal political power in Israel with the Jews.