ABSTRACT
The Israeli government, as well as the Western governments, hoped that after the Israeli eviction the Palestinian Authority would take over the rule of the Gaza Strip. Israel opened legations in some of the Arab countries, Jordan signed a peace treaty with Israel in 1994 and foreign investments grew as peace looked like a real option. After the assassination of Prime Minister Rabin in November 1995 and in the wake of another desperate Palestinian wave of terror, the peace process collapsed. After Rabin's assassination, the Labour government was replaced by right-wing Likud party head, Benjamin Netanyahu, whose policies could have led to further deterioration in Israel's international image had it not been for the events of 9/11 in the United States. World public opinion, and this time also friendly governments, pressured Israel to stop building settlements in the occupied territories and allow the peace process to be revitalised.
