The Israeli occupation of the West Bank and Gaza Strip (WBG) obliged the PLO to locate its headquarters, military bases and its mass organizations (women, students, workers, teachers, journalists and writers, etc.) in the surrounding Arab states. This, given the opposed logic of a resistance movement to that of a state concerned with security and control over its territory, inevitably put the PLO in armed confrontations with these Arab states (i.e., Jordan, Lebanon and Syria). This, together with the rapid changes in the regional and international situation, explains the change Palestinian politics underwent since the late 1960s, from that of a secular democratic state from all its citizens living there and entitled to live there, to a Palestinian state on the WBG (i.e., 22 percent of Palestine).
Thus, the PLO accepted in 1974 to establish a Palestinian sovereignty “over any territory liberated from Israeli occupation.” In 1988, with the first intifada still raging, the PLO clearly stated its acceptance of a two-state solution and its readiness to acknowledge the state of Israel. The acknowledgment of the right of Israel to exist by the PLO was clearly spelled out in Oslo Accords of 1993 under the impact of vast changes in the balance power in the region and internationally following the Gulf War of 1991 and the disintegration of the Soviet Union, the main international PLO alley. However, there was no corresponding acknowledgement by Israel of the right of Palestinians to a sovereign state of their own on the WBG with East Jerusalem as its capital nor the right of Palestinian refugees to return to their former homes as stipulated by United Nations resolutions.
Neither the Oslo Accords nor the establishment of the Palestinian Authority (PA) in 1994 led Israel to change its policies toward the Palestinians. What can be seen since Oslo is the acceleration of the segmentation of the Palestinian territory into “reserves” or “bantustans,” that Palestinian towns and villages encircled by colonial settlements, pass-by roads (for Jewish settlers only) and by Area “C” (62 percent of the West Bank), and the Israelization of East Jerusalem. This went hand in hand with installing a system of military checkpoints, administrative detentions, control of movement through Israel permits, control of natural resources and borders, a fragmented and fragile economy of the WBG, house demolition, and land confiscation. Above all, the PA was tied it security “coordination” with which all the one-sided implications of such a relationship.
The establishment of the PA under a settler-colonial rule and occupation has had a profound impact on Palestinian society. The PLO institutions were frozen as the PA focused its efforts on building quasi-state structures with the hope (illusion) that a sovereign Palestinian statehood was on the way. From its start, the PA was made dependent on external aid and transfers and hence open to external pressures.