Following the battle of the speeches between Prime Minister Benjamin Netanyahu and Palestinian Authority President Mahmoud Abbas on the issue of recognition of a Palestinian state at the UN, against the background of the potentially violent Palestinian-Israeli conflict, I indulged in a bout of retrospection.Looking back, it is very easy for me to point to the most exciting moment of my life. It was not a personal incident. Each and every one of us has exciting, joyous times with our family and friends, with regard to our careers, and, on a very different note, also during wars and disasters.Yet the most exciting moment of my life was political, and to the end of my days, I will remember every second.It was when I saw the face of Egyptian president Anwar Sadat emerge from the door of the Egyptian airplane that had brought him to Ben-Gurion Airport on November 19, 1977.At the time, I was a journalist working in the Jerusalem branch of “Davar,” the newspaper of the Histadrut trade union organization. A crowd of journalists stood nervously watching the television screens, and when Sadat appeared, I was filled with awe. One of the journalists began to weep.Not many years before, during the Yom Kippur War in 1973, our generation had lost close to 3,000 of our friends in battle.Some of them had been left behind, buried in the sands of Sinai, missing to this very day. We were still in shock from the trauma of those first days of the war, when there was a genuine, substantive threat to the very existence of the State of Israel.And now, I thought, the president of Egypt is waving his hand as a sign of peace? I am not exaggerating as I describe my joy. Even today, when talking with friends, many still say that that moment was the happiest moment of their lives.The excitement lasted for a long time.Tens of thousands of Israelis went on trips to Egypt. Nearly all of them described being welcomed warm heartedly. Later, there were difficult times – the first Lebanon war, the first intifada – and there were better times, like the Oslo Accords and the peace agreement with Jordan. Tens of thousands of Israelis visited Jordan and Morocco; and the tourist sites in Turkey, the largest Muslim country in the region, were crowded with Israeli tourists. A few Israelis even visited Tunisia and the Gulf Emirates.It is in this context that we have to ask ourselves: How did we come to the awful situation in which we find ourselves? How did the times become so terrible? What happened? What went wrong? Why is it that now, during our month of the High Holidays, it seems that the State of Israel, at least politically, is not only in a difficult place, but in a truly awful position, the worst it has been in in decades?Numerous factors have been involved.The rise of Islam is one of them. Political Islam, which is opposed to almost all of the proposals for a potential agreement, has grown stronger in the countries surrounding Israel, Iran, and eastern Asia, as well as among the Palestinians and Israeli Arabs.Simultaneously, with or without regard to Islamic radicalization, the Israeli public has become increasingly hawkish and is refusing to make concessions. Left-wing political parties and what is known as the peace camp have become insignificant.Many in Israel and around the world, as well as the Arabs and the Palestinians, blame the settlements for the situation, even though the settlements in the West Bank, Gaza, the Golan Heights and even in Sinai were there before the situation began to deteriorate. Even the annexation of East Jerusalem following the Six Day War in 1967 and the construction of huge Jewish neighborhoods did not prevent Sadat’s initiative or the signing of the peace agreements.The answer lies in two trends that have escalated over the years, and the settlements are part of them.Following the Six Day War, Moshe Dayan, then-defense minister, set conditions for the living arrangements in the West Bank and Gaza. He established the principle of the freedom of movement for all Israeli residents, Jewish and Arab alike. With one order, the border was erased and the barricades were removed.Israelis visited Shechem (Nablus) and Hebron, and Palestinians strolled through Tel Aviv and Netanya.The second principle determined that the government of Israel would not interfere with the lives of the Palestinians living in the territories. The Palestinians were to manage their own social services and financial systems.The third principle, and possibly the most crucial one, determined that Israel was to maintain barely a minimum Israeli presence in centers of Arab population. Dayan was far from being a political dove, and he frequently spoke emotionally about our return as Jews to “Shilo and Anatot, “ yet, in a move full of symbolism, he ordered that the Israeli flag be taken down over sites such as the Temple Mount and the Cave of the Patriarchs in Hebron. “We must allow them to live with dignity, and we should not provoke them, “ he declared.A significant erosion in Dayan’s policy followed successive waves of Palestinian terror attacks and brought about the reestablishment of borders and barriers, which deprive the Palestinians of their right to free movement and led to the construction of the controversial security barrier.The other major erosion in Dayan’s policy was allowing Jewish settlement in Arab population centers. Frequently, these settlements are intentionally provocative. Every time that a group of yeshiva students takes over a house in East Jerusalem, they immediately hoist the Israeli flag, and there are dozens of them throughout the Palestinian neighborhoods. The biggest Israeli flag I have ever seen is waving boldly over a house in the Arab a-Tur neighborhood, high on The Mount of Olives, visible from almost everywhere in East Jerusalem.There’s only one purpose to a flag like that: to demonstrate Jewish presence and control over Arab neighborhoods.Jewish settlement in the heart of Palestinian population centers on the West Bank are the focus of daily attention from organizations such as the UN Office for the Coordination of Humanitarian Affairs (OCHA), which regularly publishes reports about the “price tag” phenomenon.This refers to acts by extremist settlers to punish Arabs for actions taken by the IDF against the settlers. In other words, when the settlers take offense at actions of the Israeli government, they take their revenge on the Palestinians. (There have even been incidents in which settlers assaulted Israeli soldiers and sabotaged their equipment, but most of the time, they direct their fury at the Palestinians.) In September, for example, the IDF, following a High Court of Justice injunction, demolished three houses in the illegal outpost of Migron, near Ramallah. In response, there were violent confrontations between the soldiers and the settlers, but according to the UN report, settlers took immediate “revenge” on the Arabs. First, they began to throw rocks at Arab cars near the settlement of Ofra, in which a Palestinian doctor was injured and required hospitalization. Then they began to torch fields and to uproot trees, destroying some 120 trees in the village of Jalud in the northern West Bank. Parked cars were vandalized.In the village of Kusra, settlers broke into the mosque at night and tried to set it on fire while covering the walls with hate graffiti, including slogans such as “Muhammad is a pig.”These are routine phenomena and according to the UN report, they are increasing. So far during 2011, there have been 253 such incidents, in contrast to the 207 recorded in 2010. The IDF and the UN seem incapable of apprehending the culprits. No suspects have been put on trial.Palestinian violence against settlers is more deadly. In March of this year, five members of the Fogel family, including young children and a baby, were slaughtered by two young Palestinians in the settlement of Itamar in Samaria.Following his conviction September 13, Hakim Awad, 18, told the Samaria Military Court that he had no regrets, saying he and his cousin Amjad stabbed the sleeping family to death because “of the occupation.”On September 23, Asher Palmer and his infant son, Yonatan, were killed when their car overturned on Route 60 outside Kiryat Arba, in what police have determined was a terror attack.These events reveal the extent of the friction between Jews and Arabs in the West Bank. And the Arab media is expanding its reporting on the violent reality in the West Bank. A decade or so ago, there were only a few public television channels and radio stations, Arab and others, and a few dozen daily Arab newspapers. Today, there are more than a thousand satellite television channels broadcasting in Arabic, readily available to any Arabic-speaking viewer or listener, including the Al Jazeera network, which is watched by tens of millions. Often they are active in social media forums as well.All these channels, all these social networks and, of course, all the traditional media, such as radio and television, dedicate themselves to one main topic: the “horror” of the Israeli occupation. The settlers are the stars of these programs. Not long ago, one of the stations broadcast a demonstration near Ramallah by a few settlers who were protesting against the fact that the Israeli government had granted permission to pave a road leading to the new Arab city, Al-Rawabi, because the road crosses a piece of land that belongs, in their opinion, to Jews. Knesset Member Yaakov Katz, who lives in a nearby settlement, addressed the demonstrators telling them that Israel should allow the Arabs to build their new city, and then, the Jews would expel them and take over their homes, “as we did in Jaffa and Ramle.”So what are Arabs supposed to think when they hear declarations like these? And this is just the tip of the iceberg of what is broadcast to millions of viewers throughout the Arab countries, including Turkey, every day, sometimes every hour. Clips are recycled endlessly of Israeli soldiers pursuing Palestinians; checkpoints making life intolerable; Israeli planes bombing Gaza; Muslims being prevented from praying at mosques in Jerusalem.We, Israelis and Palestinians, have come to this because we could not reach an agreement.We were unable to leverage the exciting peace process that Anwar Sadat, president of Egypt, began. The writing has been on the wall for years. So we shouldn’t be surprised that the situation is as bad as it is. We should only be surprised that it has taken this long for it to deteriorate.