If we are now aware of who Arafat was, talking out both sides of his face as he did, there are those within our government who knew who he was for a long, long time. There is no excuse, except that he was one of our "designated villains", therefore allowed to live.
It makes me think our state department likes "playing the game" a lot more than they like "solving the problem".
Can you say, "Job Security"? Or maybe, "Arrogance"?
I would call it self-delusion. The State Department (at least the Near East Department) is a collection of Arabists who believe that through the last two centuries, the Arabs are the wronged party and must be compensated for the great injustice done to it by Western imperialism (for them that still continues) and colonialization (for them that still continues). The "blacklash" (diplomatic speak for the current war on terror) has its origins and roots in our policies.
Rice is a Russian specialist and not a Middle East specialists. So, she gets her briefings and her understandings from the Arabists, who can produce long, long scholarship (some good but the most garbage) that shore up their contentions.