For the Palestinians, the peace agreement of Israel with Egypt served to increase their desperation. This led to the intensification of struggle by the Palestine Liberation Organization (PLO) under Yassir Arafat.
Though the United States entered the scene and made it a personal agenda to restore peace in the Middle East, only limited progress was made in the 1978 Camp David negotiations because of mutual distrust and suspicion between the two parties. Even though this eventually brought about the 1979 Israel-Egypt Peace Treaty, dissatisfaction and stalemate in the situation led to the First Intifadaor the Arab Revolt in 1987-91 in Gaza Strip and West Bank. There was change in leadership in Israel and Yitzhak reversed his nation's stand and tried to negotiate with the PLO and participated in the secret talks in Oslo, Norway (MERIP 2006:3); as the result Israel-PLO Declaration of Principles, was signed in Washington in September 1993, which is otherwise known as the Oslo Accord. Through this PLO recognized Israel and Israel the authority of PLO. It is clear from the above that, suspicion and mistrust ruled high here from the beginning.
The main issue of contention was not one of religion, but more an issue of home-land. The Palestinians needed more areas for their large population, who had lost their homes during the wars and were living as refugees elsewhere. In one estimate their numbers were close to three million (MERIP 2006: 6). The entitlement status to be given to the Palestinians and the treatment of Israeli settlements (Israel evacuated all Israelites from the West Bank and Gaza Strip over the next few years) were other significantly unresolved issues that led to frustration. Rights to the Jordan River waters, on which was another important reason for animosity. Finally, Jerusalem with its historical places of worship was also a point of dispute, with both sides refusing to give up claim (Mideastweb 2006:1). While the Israelites consider Jerusalem as their "eternal capital" ((MERIP 2006:8), Arabs also want it as their capital because of its association with Prophet Mohammed.
According to some, in first place the agreement itself was "deeply flawed" because it did not find many takers in the Arab nations (MERIP 2006:3). Importantly, the accord did not find support amongst the radical Islamist leaders in the two strategic places of Gaza Strip and West Bank. The infighting in the Palestinian camp, spurts of violence of the HAMAS and Jihad, ensured that the Oslo Peace Initiative was hardly allowed a chance. Israel did not want to allow the return of Palestinian refugees because it would undermine their majority status and reduce their population. In a nutshell, after the Oslo Peace Accord
More than seven years have gone by and Israel has security and administrative control of 61.2% of the West Bank and about 20% of the Gaza Strip and security control over another 26.8% of the West Bank. This control is what has enabled Israel to double the number of settlers in 10 years..and to seal an entire nation into restricted areas, imprisoned in a network of bypass roads meant for Jews only...
Why is there conflict between the two peoples (now) still in 2007!
To a keen observer, it may be clear that there are no easy solutions to a problem of this