1996 - Clashes continue between Palestinians and Jewish settlers. Arafat is elected president of the Palestinian Authority. Hardline politician Benjamin Netanyahu defeats Peres in a close race for Prime Minister. PLO formally cancels its call for Israel's destruction. In 1997, under increasing U.S. pressure, Israel hands nearly all of the West Bank city of Hebron to Palestinians.
1998 - Netanyahu and Arafat sign an agreement at Wye Mills, Maryland, outlining further Israelis withdrawals from the West Bank. Israel agrees to pull out of another 13 percent of the West Bank in exchange for new security guarantees. In 1999, Israel begins transferring West Bank land to Palestinian control as part of the Wye memorandum.
1999 - Labor Party's Ehud Barak, considered a moderate, elected Israel's Prime Minister.
2000 - Israeli troops pull out of Lebanon after 22 years of occupation. Final status peace talks between Ehud Barak and Yasser Arafat at Camp David fail. The status of Jerusalem is the main stumbling block.2000 - Right-wing politician Ariel Sharon visits the Jerusalem holy site called the Temple Mount by Jews and the Haram al-Sharif (Noble Sanctuary) by Muslims. The visit sparks renewed violence."
2001 - Ariel Sharon sweeps to power in Israel's special election for prime minister. Israeli-Palestinian violence continues.
2002 - Situation worsens in the Middle East. Suicide bombings carried out by militant Palestinian groups Hamas, Islamic Jihad, and the Al Aqsa Martyrs Brigades - the military wing of Arafat's Fatah movement - kill dozens of Israeli civilians. In retaliation, Israel attacks Palestinian refugee camps to arrest Palestinian militants. More than 1,000 Palestinians and 380 Israelis die during the first 18 months of the violence, known as the Al-Aqsa intifada.