Home inFOCUS The U.S. and Israel: Shared Resolve (Summer 2025) The Two-State Illusion: Oslo and Hamas Terror

The Two-State Illusion: Oslo and Hamas Terror

Dan Diker Summer 2025
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Israeli Prime Minister Yitzhak Rabin, US President Bill Clinton, and PLO chairman Yasser Arafat at the signing of the Oslo Accords on September 13, 1993 at the White House in Washington, DC. (Photo: Vince Musi / The White House)

The Iran-backed Hamas massacre of October 7, 2023 was not an isolated act but the predictable climax of the Palestinian national and Islamic movement, from the Palestine Liberation Organization’s handmaiden, the Palestinian Authority (PA), to the fundamentalist and extremist Hamas. Both movements are wedded to rejectionism and holy war against Israel’s existence (See “Unmasking Jihad’s Quest for International Legitimacy,” Jerusalem Center for Security and Foreign Affairs,  July 17, 2024). The Gaza proto-state experiment, far from validating Palestinian statehood, exposed the two-state paradigm as an illusion based in the Oslo Accords’ fatal miscalculations, which were sustained by Israeli and Western wishful thinking and willful blindness.

Thirty years after Oslo’s signing in 1993, it has become clear that the process empowered terror rather than peace (see JCFA’s compendium, “30 Years Since Oslo: Lessons Learned).” Gaza’s post-2005 descent into a Hamas-controlled jihadist stronghold underscores the failure, as did the PA’s complicity in terror, corruption, and governance collapse in the West Bank, together burying the two-state vision.  The October 7 massacre demands a reckoning: the international community must abandon this obsolete framework and confront the Palestinian leadership’s radicalism, its terror-supporting legacy, and its indoctrination machinery, and search for alternative structures.

Gaza: From Withdrawal to Hamas Terror State

Israel’s 2005 withdrawal from Gaza – uprooting 8,000 Jewish residents, present in the Strip for three generations, and ceding full control to the PA – was heralded as a test case for Palestinian self-governance. Instead, it became a cautionary tale. Within months, Hamas, exploiting the PA’s weakness, won the 2006 legislative elections with 74 seats (44 percent of the popular vote) to Fatah’s 45 seats (with more than 41 percent). (See Lt.-Col. Maurice Hirsch, IDF (res.), “Is It Time to Declare the Failure of the Oslo Accords?” JCFA, March 3, 2025.) Between 2005 and 2007, Hamas rocket fire on Israel increased by more than 500 percent. By 2007, Hamas had violently seized Gaza, expelling Fatah forces in a bloody coup. What followed was not state-building but rather the establishment of a massive terror infrastructure – tunnels, rocket arsenals, and training camps – funded by Iran and Qatar.

Gaza’s transformation into a de facto Hamas terror state buried the two-state proposition. Between 2005 and 2023, more than 20,000 rockets from Gaza rained down on Israeli civilians. Hamas’s violent attacks culminated in the October 7, invasion – a meticulously planned operation involving 3,000 Hamas terrorists in pick-up trucks, on paragliders, and operating suicide drones. Hamas terror has enjoyed broad support among the Palestinian public.

An Arab World Research and Development (AWRAD) poll conducted between October 31 and November 7, 2023, showed that 75 percent of both West Bank  and Gaza Strip Arabs surveyed supported the October 7 massacre, with 59 percent expressing “extreme support.” The survey reported an even higher degree of support for the massacre among Palestinians in Judea and Samaria (83.1 percent) than among those in the Gaza Strip (63.6 percent). The poll also recorded that both West Bank and Gaza Arabs reject coexistence with Israel (85.9 percent), are committed to the restoration of “historical Palestine” (71.1 percent), and support the creation of one Palestinian entity “from the river to the sea” (74.7 percent)  to end the Israeli Palestinian conflict. (See “A New Poll of Palestinians: Supporting Terror and Rejecting Peace” by Maurice Hirsch).

These findings reflect not a Palestinian Arab desire for peace but an embrace of Hamas’s genocidal charter, which calls for Israel’s destruction and the killing of Jews – a stark contrast to Oslo’s promise of coexistence.

The Gaza failure exposes the folly of assuming territorial concessions could pacify religiously and ideologically fueled rejectionist forces. The 2005 pullout, like Oslo, underestimated Palestinian radicalism, leading to a security vacuum exploited by Hamas. This has resulted in a failed terror state that turned a humanitarian two-state gesture into a strategic nightmare.

Oslo’s Broken Promises and the PA’s Terror Nexus

The Oslo Accords, intended to midwife a Palestinian-governed  entity, instead entrenched a hybrid warfare strategy blending terrorism, political deceit, and global delegitimization. The PA’s “pay-for-slay” program exemplifies this betrayal (See my Foreword to “The PLO and PA Political Warfare and Israel’s Response,” JCFA, July 9, 2023). This PA program has disbursed more than $300 million annually – seven percent of the PA budget – to terrorists and their families: $3,120 monthly for a 30-year jail sentence. These stipends are  funded partly by Western aid (as documented by Brig. Gen. Yossi Kuperwasser, IDF (res.) in “Incentivizing Terrorism,” JCFA, November 2016). This flagrant violation of Oslo’s anti-terror clauses not only bankrolls violence but also glorifies it, as seen in statements by PA officials Mahmoud Al-Aloul, Abbas Zaki, Jibril Rajoub, and Munib Al-Masri, that lionize the October 7 perpetrators.The PA’s facilitation of terror groups in the West Bank compounds this breach. Cities including Jenin and Nablus have become sanctuaries for Iranian proxies Hamas, Palestinian Islamic Jihad (PIJ), the Lion’s Den, and the Marxist-Leninist Popular Front for the Liberation of Palestine (PFLP). PA security forces often collude with these terror groups in direct contravention of Oslo’s security cooperation mandates. The PA’s decision, at the G.W. Bush administration’s urging, to allow Hamas’s 2006 electoral run – despite its terror agenda, its declared rejection of Israel, peace, and of negotiations  – paved the way for Gaza’s takeover, a fatal flaw of Oslo’s design.

The PLO’s history of terror and ideological rejection of Israel underpins this dysfunction. Founded in 1964, it included factions like the nominally secular, nationalist Fatah and the Marxist-Leninist Popular Front for the Liberation of Palestine (PFLP), notorious for airline hijackings and civilian massacres. Yet, post-Oslo, PA and PLO Chairman Yasser Arafat, referencing Islamic historical warfare, framed the accords as a tactical truce akin to Islam’s Prophet Mohammed’s Treaty of Hudaibiyah, which was breached when militarily opportune.

Arafat continued this deceptive strategy in refusing to amend the PLO Charter’s call for Israel’s annihilation, despite his false representations to then-US President Bill Clinton, in breach of the Palestinians’ commitments under the 1998 Wye River Memorandum. This duplicity, coupled with Arafat’s and his successor, PA Chairman Mahmoud Abbas’s praise of terrorists killed by Israel as “martyrs,” reveals a leadership aligned with jihad, not peace.

Indoctrination: A Generational War Machine

Palestinian education, under PA oversight, has fueled this rejectionism. PA textbooks have erased Israel from maps, glorified “martyrdom,” and have denied Jewish historical ties to the land. External studies, like IMPACT-se’s 2022 report, confirm this curriculum’s role in radicalizing youth, ensuring that each generation inherits a warlike ethos antithetical to a two-state vision.

Oslo’s failure to counter  the “Palestinian right of return” and other propaganda has radicalized Palestinian Arabs. And PA indoctrination has transcended grievances, institutionalizing a culture of violence that renders coexistence impossible, at least in the current era.

Abbas’s Crumbling Authority

Abbas, now 89 and in his 20th year of a four-year term, wields virtually no control beyond Ramallah. A May 2025 Palestinian Center for Policy and Survey Research (PCPSR) public opinion poll surveying both West Bank and Gaza Arabs reported nearly twice as much support for Hamas over Abbas’s Fatah party, including in future voting projections for West Bank residents. (See PSR Press Release). This explains why the PA has avoided elections for 20 years: to evade a Hamas sweep.

The PA has become a “corrupt shell,” in the words of Israeli policy advisor Michal Cotler-Wunsh, incapable of governing a state or curbing Iranian proxies. Gaza’s Hamas takeover and the West Bank’s militant hotspots illustrate a fractured polity unfit for sovereignty, mocking Oslo’s state-building aspirations.

The Two-State Illusion Post-October 7

The so-called “two-state solution” presumed a Palestinian partner committed to peace. The Oslo Accords, signed in 1993, were driven by a confluence of American and Israeli optimism, and in retrospect, Western naivete and willful blindness,  underpinned by a post-Cold War belief in a global “peace dividend.” American policymakers, buoyed by the Soviet Union’s collapse in 1991, saw the end of superpower rivalry as an opportunity to resolve regional conflicts, including the Israeli-Palestinian dispute. The Clinton administration, particularly, viewed the Palestinian-Israeli peace process as a pathway to Middle Eastern stability, believing that economic cooperation and Palestinian self-governance would foster peace and reduce anti-Western sentiment (see “The Reckoning,” by Shoshana Bryen, October 5, 2024, The Daily Caller). This mirrored a broader Western hope that liberal democratic values could transform adversarial societies, ignoring the deep-rooted rejectionism within Palestinian leadership.

Israeli architects of Oslo, led by leftist academics such as Yair Hirschfeld and Ron Pundak, politically progressive diplomats Uri Savir and Yossi Beilin, and leaders Shimon Peres and Yitzhak Rabin, shared a vision of mutual recognition and coexistence. Hirschfeld and Pundak, operating initially without official sanction, believed secret talks with the PLO could bypass stalled negotiations in Washington, offering a pragmatic framework for Palestinian autonomy (see Savir, The Process, 1998). Beilin and Peres saw Oslo as a chance to marginalize territorial maximalists and secure Israel’s future through diplomatic compromise, while Rabin, a security hawk, reluctantly endorsed the process to address the Palestinian issue before confronting more strategic threats, particularly the Iranian regime’s race for nuclear weapons and regional supremacy. The Oslo acolytes anticipated a “peace dividend” of economic growth, regional cooperation, and reduced military burdens, assuming Palestinian goodwill.

This optimism reflected what Kuperwasser and historian Dr. Joel Fishman term “willful blindness.” Israeli and American leaders overlooked Hamas’s and the PA’s terror activities, including the PLO’s unchanged charter and rising violence, projecting Western rationalism onto an Arab nationalist and Islamic rejectionist ideology. This miscalculation, rooted in a secular, post-Soviet hope for peace, ignored Hamas’s growing influence and the PA’s “pay-for-slay” program, setting the stage for Oslo’s collapse and the October 7 catastrophe.

In a clear-eyed historical view, Palestinian rejectionism can be traced back to the early 1920s, when the first Palestinian “mufti,” Haj Amin Al-Husseini, a British mandate appointee, falsely accused Jewish worshippers of endangering the al-Aqsa mosque on Temple Mount. Palestinian ideologically-fueled opposition to Jewish presence and sovereignty would continue to the current day. Former US Ambassador David Friedman called Oslo “a bunch of handshakes” devoid of substance – a verdict validated by thousands of Israeli deaths since 1993. Oslo’s security imbalance lies in empowering terror-supporting entities.

A Realistic Alternative

The PA’s current structure is unsalvageable: any path forward demands transformation. Kuperwasser and  Hirsch, in “Unmasking Jihad,” outline six prerequisites to any future Palestinian entity: (1) condemn October 7, (2) end “pay-for-slay,” (3) recognize Israel as the Jewish nation-state, (4) halt terror incitement, (5) stop anti-Israel international campaigns, and (6) actively fight terror. These reforms, absent since Oslo, are essential to dismantle the PA’s terror ecosystem and shift its narrative.

Yet, even a possibly reformed or more probably restructured Palestinian entity would indicate that a sovereign Palestinian state is unviable, and would constitute a strategic threat to Israel’s existence, given Gaza’s October 7 precedent and jihadist entrenchment.

There are other options. For years, the Jerusalem Center for Security and Foreign Affairs (JCFA) has proposed a federal-confederal model: localized Palestinian self-governance, affiliated with Jordan and/or other regional actors, with complete Israeli security. This could involve autonomous enclaves in the West Bank and Gaza, linked economically and administratively to a broader Jordanian-Palestinian federal-confederal model. Unlike Oslo’s naive statehood push, this decentralized Palestinian self-governance approach prioritizes security and stability, drawing on the 1979 Camp David autonomy concept as discussed by former US President Jimmy Carter and Israeli Prime Minister Menachem Begin. This would better ensure Israel’s security while offering Palestinians self-rule.

Beyond the Illusion

Gaza’s post-2005 descent into a Hamas terror state culminating in the atrocities of October 7 buried the two-state proposition. The Israeli public’s eyes are wide open. A May 2025 JCFA poll showed that 78 percent of Jewish Israelis reject an additional terror-supporting Palestinian state. The PA’s terror facilitation and indoctrination, and Abbas’s feeble rule reveal a partner incapable and unwilling to foster peaceful relations with Israel. Oslo’s implosion from Gaza’s failure to the West Bank’s radicalization demands a new paradigm.

The federal-confederal approach is a more viable option, conditioned on strict and verifiable restructuring, and on de-radicalization of the Palestinian public, media, and political discourse. This is the work of a generation that demands a pragmatic reset: security for Israel and its recognized legitimacy as the nation-state of the Jewish people, autonomy for Palestinians, and hopefully an end to indoctrination, extremism, and terror.

Dan Diker, Ph.D., is President of the Jerusalem Center for Security and Foreign Affairs, a former Secretary-General of the World Jewish Congress, and a Research Fellow at the International Institute for Counter-Terrorism at Reichman University, with expertise in counter-political warfare, Middle East policy, and combating antisemitism.