I have been saying for a long long time now that Arafat's tenet that "time is on our side", is faulty, the longer it take, the smaller the footprint the future Palestinian state will have. (see for instance #msg-1471436, #msg-805871, #msg-641519 and #msg-578798). As a matter of fact, I am becoming convinced that there will no longer be an option of two Palestinian states (Jordan and the West bank), but we will return back to the pre 1967 situation where the West bank is part of one Palestinian state, Jordan (and with with boundaries quite different than those in 1967), and Gaza will be taken back by Egypt, with a big package of development of the El Arish zone (see #msg-5582840), exce[pt, it will not be an autonomous Palestinian state, but part of Egypt as it was pre 1967. If there ever was a separate "Palestinian entity" seeking national expression, Arafat has managed to kill any chance such national actualization, separate of other Arab nations (Jordan and Egypt) will ever evolve.
The Bush/Sharon announcement is the first step in that direction. The Palestinians have not managed to produce a negotiating partner in peace discussions with the Israeli, and such a historical failing will result in the final "Nakba" to such national aspirations. Well, in time, Jordan may rename itself Palestine, after all, by then 90% of the population will be "Palestinian".
I really never understood why there was a pressing need for two Palestinian states.