This chapter examines the turbulent aftermath of Camp David, marked by the al Aqsa Intifada, escalating violence and renewed diplomatic efforts through the Clinton Parameters, the Taba talks and the 2002 Arab Peace Initiative (API). President Bill Clinton’s proposals sought compromise on core issues: Jerusalem would be divided along demographic lines – Arab areas under Palestinian sovereignty and Jewish areas under Israeli control – while the Haram al-Sharif and Western Wall would be separately administered. On refugees, Clinton distinguished between moral acknowledgement and practical resolution, proposing international compensation, resettlement and rehabilitation efforts. Despite these efforts, Israeli elections in February 2001 brought Ariel Sharon to power, ending prospects for immediate peace. The API, endorsed by the Arab League, offered Israel full normalisation in exchange for withdrawal to 1967 borders and a just refugee solution. While Yasser Arafat viewed it as a viable peace framework, Hamas rejected it outright, and Israel and the US showed little enthusiasm. Amid continued terror, Israel began constructing a separation barrier in 2003. The API was sidelined, and Palestinians turned to rocket attacks. The collapse of diplomacy led to years of violence and a prolonged stalemate in negotiations.