Thanks to the Oslo autonomy accords, signed 10 years ago on the White House lawn, Israelis and Palestinians started to believe peace was possible, but disillusion has replaced such hopes in the past decade.
On September 13, 1993, Palestinian leader Yasser Arafat who now faces the threat of expulsion and then Israeli premier Yitzhak Rabin signed the US-backed accords, with the long-time foes shaking hands for the world's cameras.
The world hailed the event as a historic turning-point in the intractable Israeli-Palestinian conflict, despite some opposition from minority circles on both sides.
Perhaps Arabs and Jews could, after all, share the Holy Land in peaceful coexistence.
The "Declaration of Principles" on autonomy starting with Jericho and Gaza did not specifically refer to a Palestinian state as the final destination, but that was understood as the logical conclusion of the peace process.
Arafat in 1994 made a triumphant return and established the Palestinian Authority which was to oversee the road to statehood.
A decade after that historic moment on the White House lawn, the West Bank has been reoccupied and 74-year-old Arafat is president of a Palestinian Authority which exists in name only and governs virtually nothing.
He has been under siege for 20 months and is now threatened with expulsion and even assassination by the Israeli government under Prime Minister Ariel Sharon which has decided to "remove" him when the time is right.
Such an action would sign the death warrant of the peace process Arafat had a hand in launching and for which he shared the Nobel Peace Prize.
But that is the result of three years of the Palestinian uprising, or intifada, which have cost the lives of more than 800 Israelis and nearly 2,600 Palestinians.
In reply, Sharon's government launches almost daily military raids and "targeted killings" of the leaders of the militant Islamic group Hamas, against which it has declared all-out war.
Each side blames the other for the current situation.
The Israelis accuse Arafat and the Palestinians of having broken their promise to renounce terrorism and of never having admitted the right of the state of Israel to exist.
The Palestinians, meanwhile, reproach the Israelis for the spectacular spread of Jewish settlements in the territories since 1993.
The number of settlers has more than doubled in 10 years to around 230,000, to which the Palestinians point as proof that Israel never had any intention of allowing a Palestinian state to exist.
Ten years after Oslo, the Palestinian suicide bombings show no sign of letting up, with the apparent support of the majority of Palestinians, who view them as legitimate "acts of resistance".
According to an opinion poll last week, more than three Israelis in five now believe Arafat should be either "liquidated" (37 percent) or at least "expelled" (23 percent).
The spirit of Oslo has now given way to what Palestinian researcher Mahdi Abdel Hadi calls "the culture of revenge" and fear has now driven out the confidence it had been so hard to establish.
Another Palestinian researcher, Zacharia al-Qaq, is even more pessimistic, predicting the demise of the Palestinian Authority within six months, the current state of affairs being more than just part of "the cycle of violence".
"It's a new era in the Israeli-Palestinian conflict."
But Palestinian negotiations minister Saeb Erakat, who was a member of the Palestinian negotiating team at the 1991 Madrid peace conference ahead of the Oslo accords, appealed for both sides not to give up hope.
"At this critical hour, at this sad hour, 10 years after Oslo, I don't think we should despair. I think we should tell Israelis and Palestinians that peace can be achieved," Erakat said on CNN on Saturday.
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