This is true. There is no erasing that the Israeli incursions have greatly reduced the level of terrorism, and will continue that effect for a long time ahead.
But, unfortunately, Arafat has risen from the near-dead before. When he went to Camp David, his popularity among his people was low because they feared he would betray their cause. Ever since he returned, having rejected all compromises, his stock in the Palestinian street has been high -- until this week. Now, once again, they fear he has gone soft and become a tool of the Western powers. Arafat will now be doing everything possible to prove he is just as militant as Hamas and friends. Whether he can pull it off remains to be seen, but the Saudi's sure seem to think he can.