Netanyahu has always tried to insist that he had the upper hand and could make demands, in terms of security, military and borders, but the truth is the opposite. He can control the Arabs and their new state no more than anyone can keep a puddle on the floor from spreading all over.
It was Netanyhu's acceptance that has facilitated the rapid progress the P.A.'s Fatah has made, including having the confidence to officially join with Hamas. Mahmoud Abbas would have had a much tougher time if we had fought it tooth and nail. But the simple fact that the Israeli Government has been desperately eager to join any sort of "peace negotiations" with the P.A. smoothed the path to the situation we have now.