1996 has been a year full of disturbing events despite the focus on the continuation of the negotiations and the implementation of the interim provisions set forth in Oslo I and II. 1995 ended with the long awaited, though very partial, Israeli redeployment from major West Bank towns. However, the sense of optimism which followed this move was abruptly diminished by the first painful event of the new year: the assassination of Hamas activist Yahya Ayyash ("The Engineer"), murdered by Israeli agents in Gaza on 5 January. Also in January, Palestinian women prisoners went on a hunger strike to protest their still not being released from Israeli jails. On 16 January, the Knesset passed the Oslo II bill with a thin majority vote of 48 to 44. The next day, the IDF withdrew from Abu Dis, and on 20 January, the first Palestinian political elections took place, albeit under unsatisfactory conditions, whereby voters, mainly in Jerusalem, were threatened by the Israeli army.

In February, Yasser Arafat was sworn in as the first elected President of Palestine, and the newly elected 88-member Palestinian Legislative Council (PLC) held its inaugurating session in Gaza. In February and March, a series of suicide bomb attacks, carried out in Jerusalem, Ashqelon and Tel Aviv, and widely regarded as revenge for the killing of Ayyash, left dozens of Israelis dead. Israel reacted by completely sealing off the Palestinian Territories, massive raid and arrest campaigns, closing down Islamic institutes, and destroying the houses of the families of those involved in the bombings. Acting Prime Minister Peres declared a war on Hamas and announced a halt in the peace talks with the PLO. The urgently convened international summit on combatting terrorism held in Sharm Al-Sheikh was not able to ease the tension and, by the end of March, just another deadline for Israeli withdrawal from Hebron had passed.

In April, thousands of Palestinian students took to the streets in an unprecedented protest against the PNA security apparatus's raid on An-Najah University. On 18 April, President Arafat and PM Peres resumed their talks and confirmed the commencement of the final status talks in May. A few days later, the PNC met for the first time since 1964 on Palestinian soil and voted to amend the PLO Covenant in accordance with the Oslo stipulations.

The month of May saw the beginning of the final status talks between Israel and the PNA in Taba, President Arafat's announcement of his new cabinet, and the swearing-in of the new PNA government in Ramallah. Palestinian concerns, however, were not eased by these events as the situation on the ground remained very much the same, and all remaining was lost when the extreme nationalist half of the Israeli electorate - openly opposing the Oslo process - returned Likud to power on 29 May, although by a very tiny margin.

With the announcement of the final election results in early June, and of Benyamin Netanyahu as the new Prime Minister, Palestinian frustration came to a peak. The concern about the new right wing government spread throughout the Arab world and led to a series of inter-Arab meetings, the first of which was a trilateral Jordanian-Egyptian-Palestinian summit which convened in Aqaba immediately after the elections. A few days later, Egyptian President Hosni Mubarak, Syrian President Hafez Al-Assad and Saudi Crown Prince Abdul Aziz met in Damascus, where they called for a pan-Arab summit to discuss the peace process in the light of the Israeli election results. The summit took place from 21-23 June in Cairo and focused on a redefinition of the Arab peace strategy. The G7 and Russia also expressed concern for the continuation of the peace process at their meeting in Paris by the end of June.

In July, the PNA released some of the 900 Hamas and Islamic Jihad members arrested following the spring suicide bombings. Oslo negotiator Yair Hirschfeld gave details of "secret verbal understandings" the Rabin government had reached with the PNA, and on 23 July, Arafat met with Likud's David Levy, presenting a list of Israeli violations.

The first news in August reconfirmed fears that the new Likud government disregards the spirit of the Oslo agreements and rejects the 'land-for-peace principle: the Israeli cabinet voted unanimously to cancel restrictions on settlement development in the West Bank and Gaza. August also witnessed the tenth death of a prisoner in PNA custody and the PNA's refusal to release the students held since the April demonstrations, as ruled by the Ramallah High Court.

Continued Israeli settlement expansion and house demolition policies remained a major concern throughout the year and on 29 August, Palestinians throughout the territories observed a four-hour general strike, called for by Arafat in protest of these policies; and in September, the Arab League held an extraordinary meeting in Cairo to discuss Israel's continuous settlement construction.

Another ongoing concern was Jerusalem, cut off the rest of the Palestinian Territories for the fourth consecutive year. Despite the fact that the Oslo Agreement stipulated that the Jerusalem question be discussed in the final status talks and notwithstanding international condemnation of unilateral actions taken to change the status quo of the city, Israel constantly tried to create more facts on the ground prior to the commencement of the negotiations on the city. The West Jerusalem Municipality continued its campaign to destroy 'unlicensed' Palestinian homes. In the first few months of the Netanyahu government alone, two buildings were destroyed and 41 houses received demolition orders. Palestinian institutions in the city remained subject to harassment, due to their alleged affiliation with the PNA. Moreover, new discriminatory bureaucratic methods were introduced to control the number of Palestinians who legally reside in the city, whereby Palestinian Jerusalemites have to prove that the city is their "center of life".

A major crisis erupted when the Israeli government inaugurated a tunnel under the Al-Haram Al-Sharif compound, linking Via Dolorosa with the Wailing Wall, on 24 September. In the wake of the opening, clashes between Palestinians and Israeli forces broke out and the Intifada-like civil unrest rapidly spread from Jerusalem throughout the Palestinian Territories, with the main battlefields being Al-Bireh/Ramallah and Bethlehem, areas which the Israeli army entered for the first time since the redeployment. In the course of the clashes, Nablus became another center of tension when Israel positioned tanks at the edge of the city for the first time since 1967 after seven Israeli soldiers were killed and tens more captured during a battle at Joseph's Tomb on 26 September. The next day, Israeli soldiers invaded the Al-Aqsa compound and fired at worshippers. By the following day when, in the wake of the impending summit in Washington, the situation calmed down, 62 Palestinians had been martyred and more than 1,600 injured, while 14 Israeli soldiers had been killed and 50 wounded.

The summit in Washington on 3-4 October between Arafat, Netanyahu, Clinton, and King Hussein bore no results, and the PNA could do no more than repeat its condemnation of the tunnel opening. In Jericho, King Hussein - the first Arab leader to visit the autonomous Palestinian areas - announced his strong opposition to the Israeli stand on the peace talks. Also in October, French Prime Minister Chirac, in an address to the PLC in Ramallah, confirmed France's support of Jerusalem becoming the capital of the Palestinian state. Throughout the month Israeli settlers became increasingly volatile, attacking Palestinian civilians and killing three, among them 11-year old Hilmi Shusheh.

The tension remained high throughout November and US envoy Dennis Ross returned to Washington with no progress achieved in the talks on redeployment from Hebron.

At the beginning of December, in another concerted Arab action, the Arab League convened and sent a warning to Israel that its settlement policy was seriously threatening the peace process. The year ended with the reopening of Hebron University and Polytechnic after ten months Israeli-imposed closure.