Why Arafat? Michael Oren writes in today's WSJ (subscription required):

But while Israelis may have exploited the [Oslo Accords] treaty's spirit, the Palestinians flagrantly disregarded its letter. No sooner had Arafat returned from Washington than he began smuggling explosives and weapons into the territories, harboring wanted terrorists, and educating Palestinian children to destroy Israel — all blatant breaches of Oslo. In the mid-'90s, Arafat's Palestinian Authority failed to stop and in some cases abetted the suicide bombers who killed hundreds of Israelis. Yet, in spite of these gross violations, neither Arafat nor his Authority was ever called to task. Advocates of Oslo equivocated that the Palestinians would comply with the accords but only after they had achieved statehood, and until then, they were too weak to clamp down on terrorism or even to cease incitement. The many Israelis who died in the interim were dubbed, perversely, "victims of peace."

Another, subtler, reason for Oslo's collapse was the absence of mutuality. The accords called on both sides to "recognize their mutual legitimate and political rights," but while Rabin specifically recognized the rights of the Palestinian people, Arafat never acknowledged the rights or even the existence of a Jewish people. Had he done so, he would have accepted the Jews' claim to a permanent state in their homeland, and signaled his willingness to divide that land with them. Instead, he arrogated all of the land for the Palestinians and sought to transform Israel into a de facto Palestinian state through the mass repatriation of refugees. While "Palestinian people" and "Palestinian state" entered Israel's political lexicon, the words "Jewish people" and "Jewish state" never passed his lips. Privately, with President Clinton, he even denied that the Jews had historical ties to Jerusalem.