Benjamin Netanyahu’s re-election effort was a colossal failure.

Netanyahu set up peace discussions with Yasser Arafat after the bombings and demonstrations that marked the end of his first term. A number of significant intermediate problems mandated by the 1993 Oslo Peace Accords were resolved by Netanyahu and Palestinian Authority President Yasir Arafat. In exchange for Israeli concessions of an additional 13% of the West Bank, the Palestinians agreed to delete language from their founding charter that called for the destruction of the Jewish state. The left accused Netanyahu of deliberately obstructing the peace process, while the right accused him of betraying those who had voted for him in the hope that he would never cede Israeli land. Netanyahu came under assault from both sides of the political spectrum.

Even though Netanyahu postponed the second Israeli pullout, which was supposed to happen on December 18th, he had already damaged his relationship with his right wing constituency. The cabinet of Netanyahu was not pleased. Right-wingers and the ruling coalition opposed the arrangement. The peace talks were suspended in mid-December of 1998 when Parliament chose to dismiss Netanyahu's administration and schedule elections in the spring. After losing the 1999 election, Netanyahu gave up the leadership of the Likud.

From the beginning, his reelection campaign was unsuccessful. Voters lacked faith in his contradictory proposals. Someone with close links to the prime minister was accused of fraud. After Netanyahu's attorney general, a scandal sprang out. All of these problems resulted in Netanyahu's election loss to Labour Party candidate Ehud Barak.