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In 1979 Egypt’s President Anwar al-Sadat signed a bilateral peace treaty with Israel. Their common opposition to that treaty brought King Hussein and Yasser Arafat closer, but relations remained uneasy, as the Palestinians suspected that Jordan remained indifferent to their national rights. In large part, Jordan’s difficult relations with the PLO derived from Israel’s – and therefore Washington’s – refusal to recognize or deal with the PLO directly. All the major initiatives to resolve the Palestinian-Israeli conflict – from al-Sadat’s in 1978-1979 to the Reagan Plan in 1982 and the Madrid Peace Conference in 1991 – envisaged some form of Palestinian autonomy in a West Bank associated to a greater or lesser extent with Jordan, and all assigned Jordan a key negotiating role.
In September 1993, however, the PLO itself made peace with Israel by signing the Oslo Accords. After Oslo, King Hussein felt free to follow suit. On 26 October 1994 the two sides signed a full peace treaty. An immediate tangible result was a dramatic increase in US aid. In April 1995 Jordan and Israel exchanged ambassadors, and tourist and other commercial exchanges began. In May 1996, however, the hardline Likud bloc, dedicated to continued colonization of the Occupied Territories, won power in Israel. The Oslo Accords stalled, and the Jordanian-Israeli peace stagnated.