Yasser Arafat started the intifada in September 2000, just weeks after he had rejected at Camp David Israel's offer of withdrawal, settlement evacuation, sharing of Jerusalem and establishment of a Palestinian state. Arafat wanted all that, of course, but without having to make peace and recognize a Jewish state. Hence the terror campaign -- to force Israel to give it all up unilaterally.

     Arafat failed, spectacularly. The violence did not bring Israel to its knees. Instead, it created chaos, lawlessness and economic disaster in the Palestinian areas. The Palestinians know the ruin that Arafat has brought and they are beginning to protest it. He promised them blood and victory; he delivered on the blood.

     Even more important, they have lost their place at the table. Israel is now defining a new equilibrium that will reign for years to come -- the separation fence is unilaterally drawing the line that separates Israelis and Palestinians. The Palestinians were offered the chance to negotiate that frontier at Camp David, and chose war instead. Now they are paying the price.

     It stands to reason. It is the height of absurdity to launch a terror war against Israel, then demand the right to determine the nature and route of the barrier built to prevent that very terror.

     These new strategic realities are not just creating a new equilibrium, they are creating the first hope for peace since Arafat officially tore up the Oslo accords four years ago. Once Israel has withdrawn from Gaza and has completed the fence, terror as a strategic option will be effectively dead.

The only way for the Palestinians to achieve statehood and dignity, and to determine the contours of their own state, will be to negotiate a final peace based on genuine coexistence with a Jewish state.

     It could be a year, five years or a generation until the Palestinians come to that realization. The pity is that so many, Arab and Israeli, will have had to die before then.