Yasser Arafat - Mohammed Abdel Rahman Abdel Raouf Arafat al-Qudwa al-Husseini ياسر عرفات

In mid-1996, Benjamin Netanyahu was elected Prime Minister of Israel by a margin of just one percent. Palestinian-Israeli relations grew even more hostile as a result of continued conflict. Despite the Israel-PLO accord, Netanyahu opposed the idea of Palestinian statehood. In 1998, US President Bill Clinton persuaded the two leaders to meet. The resulting Wye River Memorandum detailed the steps to be taken by the Israeli government and PNA to complete the peace process.

Arafat continued negotiations with Netanyahu's successor, Ehud Barak, at the Camp David Summit in July 2000. Due partly to his own politics (Barak was from the leftist Labor Party, whereas Netanyahu was from the rightist Likud Party) and partly due to insistence for compromise by President Clinton, Barak offered Arafat a Palestinian state in 73% of the West Bank and all of the Gaza Strip. The Palestinian percentage of sovereignty would extend to 90% over a ten to twenty-five year period. Also included in the offer were the return of a small number of refugees and compensation for those not allowed to return. Arafat rejected Barak's offer and refused to make an immediate counter-offer. He stated to President Clinton that, "the Arab leader who would surrender Jerusalem is not born yet". The move was criticized even by a member of his own negotiating team and cabinet, Nabil Amr.

Negotiations continued at the Taba summit in January 2001; this time, Ehud Barak pulled out of the talks to campaign in the Israeli elections. In October and December 2001, suicide bombings by Palestinian militant groups increased and Israeli counter strikes intensified, causing the outbreak of the Second Intifada. Following the election of Ariel Sharon in February, the peace process took a steep downfall. Palestinian elections scheduled for January 2002 were postponed — the stated reason was an inability to campaign due to the emergency conditions imposed by the Intifada, as well as IDF incursions and restrictions on freedom of movement in the Palestinian territories. In the same month, Sharon ordered Arafat to be confined to his Mukata'a headquarters in Ramallah, following a suicide bombing in the Israeli city of Hadera; US President George W. Bush supported Sharon's action, claiming that Arafat was "an obstacle to the peace".