During the 1970s, Moshe Dayan, then the Israeli foreign minister, was asked by a high-ranking American official why Israel would not talk with Yasser Arafat. "Because he is a terrorist," responded Dayan. "Arafat is no longer a terrorist," the American corrected Dayan. "He simply cannot control all the PLO factions, some of which are engaged in terrorism." "If Arafat cannot control his own people," snapped Dayan, "that's an even more important reason why we shouldn't talk with him."

Twenty-five years have passed and nothing appears to have changed. Even as new talks with Arafat look inevitable, a wave of seemingly unending violence has left U.S. and Israeli officials again debating whether he is a terrorist, is helpless to control terrorists or is the only indispensable Palestinian negotiator. Or all of the above.

The Bush administration seems to view him as all of the above. For more than a year, President Bush has refused to meet Arafat until the Palestinian leader takes -- and enforces -- a stand against terrorism. Now U.S. special envoy Anthony Zinni is meeting with Arafat anyway. And while Vice President Cheney did not meet with Arafat last week, he said he might return to the Middle East to do so as early as this week if the Palestinian leader meets certain conditions. On Friday, President Bush said at a news conference in Mexico, "A meeting could happen if and when Chairman Arafat performs, does what he's supposed to do."

But in the eyes of Israelis, it will take more than a few days -- or a few steps -- for Arafat to undo the damage inflicted by 18 months of attacks. Just when Israel was prepared to pack its luggage and leave the West Bank and Gaza for good, the Palestinians began a war because they wanted more concessions. This is why the onus is on Arafat, to show he's genuine by stopping terrorism.

During the 1990s, there was a feeling in the United States and Israel that Arafat had dispelled both of Dayan's reservations. In the 1993 Oslo talks, during which I represented the Rabin-Peres government, Arafat undertook a solemn commitment on behalf of the Palestinian Liberation Organization and enshrined in the Israel-PLO Mutual Recognition Agreement of 1993, "to renounce the use of terrorism and other acts of violence and [to] assume responsibility over all PLO elements and personnel in order to assure their compliance, prevent violations and discipline violators."

For the late Israeli prime minister Yitzhak Rabin, that PLO commitment was the key to accepting Arafat as a negotiating partner committed to a two-state solution. Rabin brushed aside Israeli critics, who said that Arafat was merely using the Oslo plan to gain a strategic foothold in the West Bank and Gaza from which to pursue his plan of destroying Israel in stages. With a reputation as Israel's "Mr. Security," Rabin convinced most Israelis to start down the bumpy road to peace.

Over the past 20 months, Arafat has made Israelis see him again as Dayan once did. He achieved this by rejecting the Camp David plan in July 2000 that would have included an Israeli agreement to withdraw from almost all of the West Bank and Gaza and half of Jerusalem. His reluctance to give up the Palestinian right of return called into question his commitment to a two-state solution where one is Jewish and the other Palestinian. We were never talking about a two-state solution where both were Palestinian. Then, after the Camp David talks failed, in flagrant violation of the most fundamental part of the Oslo agreement, he permitted a series of terrorist acts against Israeli civilians and soldiers now referred to by Palestinians as the "Al Aqsa intifada." After 18 months, the casualties include thousands of Palestinians and Israelis, and a host of cease-fire initiatives.

Most Israelis are even more pessimistic than I am. But things are so bad now that I believe people on all sides are beginning to grasp the urgency of fixing the situation. If negotiations are to move forward ever again, it is important to dismiss two theories that have gained acceptance and demonized both leaders.

One is that Arafat's endorsement of Oslo was an act of deception -- that he never intended to make peace. As someone who spent three years in detailed negotiations with him, I do not believe that. I have seen him make bold decisions (albeit not on the most fundamental issues). Moreover, this view oversimplifies the Oslo agreement, which grew out of an Israeli-Palestinian reconciliation process that started well before 1993 and involved many other Palestinians with stakes in the outcome.

The other theory is that the current war started only because of Ariel Sharon's September 2000 visit to the Temple Mount, a place holy to both Jews and Muslims. This is utter nonsense. Over the past 25 years, I have participated in talks with Egypt, Syria, Lebanon, Jordan and the PLO that were replete with problems, many more complicated than Sharon's provocative visit to the Temple Mount. Yet we managed to resolve them through negotiations.

So why can't Palestinians and Israelis now do the same thing: Stop the violence and get back to the negotiating table, especially because a comprehensive solution was so close at Camp David?

The answer lies primarily in the personality of Arafat, and the dichotomy between his exceptional shrewdness and tactical skills, on the one hand, and his leadership and strategy, which are seriously wanting, on the other.

In 1974, Arafat ended his historic speech to the U.N. General Assembly by saying: "I have come bearing an olive branch and a freedom fighter's gun. Do not let the olive branch fall from my hand." In Oslo, Arafat promised to let the gun fall and keep only the olive branch. In fact, he kept the gun, just in case the olive branch would not give him everything he wanted. Now, he wants to use them alternately, or simultaneously, for gains.

Arafat does not see any problem with this approach. He believes his people were wronged by Israel. The case of the Karine A, an arms-laden cargo ship bound from Iran to the Palestinian Authority, showed that Arafat believes it is morally acceptable to lie to Israel or violate agreements, if this helps him right this wrong.

Moreover, Arafat believes terrorism worked in the past, when Israel agreed to make concessions in return for promises to end the violence, so why not use it again? But that is shortsighted. The casualties inflicted on Israel -- and Arafat's violations of the Oslo agreements -- have virtually eradicated the Israeli peace camp. Israel's response has had a similar effect on Palestinian popular opinion. Trust has been lost, and it will take years for the two peoples to regain it.

It is a well-known phenomenon in high-stakes diplomatic negotiations that before every breakthrough, there must be a crisis. Arafat has perfected the art of brinkmanship, artificially creating crises to extract more concessions. I remember in the early 1990s when, at a televised event, he refused to sign pre-arranged maps attached to the first of the Oslo accords establishing the Palestinian Authority in Gaza and Jericho. He wanted to sign the text only, haggling at the last minute to extract more land. The ceremony had to stop until Israeli, Palestinian and U.S. diplomats found a way around his refusal.

It was expected that Arafat would provoke a crisis before concluding a final deal with Israel. The intifada presented Arafat with a chance to extract new concessions from Israel; but this time, the genie that escaped the bottle was so powerful that Arafat, the master of negotiating up to the edge, fell over the edge.

Arafat, the ultimate survivor, has always ruled by consensus. Rather than try to sway Palestinian opinion toward peace the way Rabin did with Israeli opinion, Arafat has tried to secure the support of the Palestinian refugees, as well as groups such as Hamas and Islamic Jihad, which oppose the Oslo agreement and support the destruction of Israel. To placate them as well as Israel, Arafat has deployed his skill at using sentences that can be interpreted in opposite ways. And he has relied on the Oslo plan, which deferred the hardest elements until the last stage of the negotiations.

There is a certain logic to Arafat's approach. After all, Rabin is dead; Arafat lives. Israel won't dare harm him; Palestinian extremists might not hesitate. But Arafat has become a hostage to consensus. He knows that to reach a final agreement with Israel, he needs to give up the "right of return" -- which will cost him the support of the Palestinian refugees -- and disarm Hamas and Islamic Jihad -- which may cost him his life. So he has postponed, as much as possible, this moment of truth.

If the United States and the rest of the world get both Sharon and Arafat to stop the violence, in my mind there is no question that Israel would honor a cease-fire. Arafat will then have another chance to show leadership.

Israelis have always been ready to reconcile with former enemies. During the 1978 Israel-Egypt peace negotiations, I saw Israeli and Egyptian generals, who only a few years earlier had fought each other in the Yom Kippur War, hugging and kissing. Once conditions change, agreement becomes feasible. Peace may take a few more years, but it is still attainable.

Joel Singer, a Washington-based partner in the law firm Sidley Austin Brown & Wood LLP, helped negotiate the Oslo agreements for the Rabin-Peres government from 1993 to 1996.