On one hand, Israel is quite right in stating that Arafat is hurting rather than helping the peace process. I believe tension in the entire Middle East would be greatly relieved if Arafat were to voluntarily leave the country and retire to a sunny beach on the coast of Spain. I don't think he is helping the Palestinean people any longer.
But on the other hand, nothing will turn him into a martyr quicker than a forcible ejection. All that will do is incite Hamas and induce further violence. Plus, with Arafat gone, is there another leader amongst the Palestineans with enough charisma to actually get the nation to follow him, without being a raving loon?
How can this conflict ever come to a rational conclusion? The two sides view things in a completely contradictory way. Israel responds to each act of violence by (A) taking violent action against the suspected attackers, which is a reasonable course of action, and (B) by punishing the entire Palestinean population through shutdowns and curfews and restrictions, which is NOT reasonable. The Palestineans choose to see the Israeli responses as an attack on the nation as a whole, not as revenge against a lunatic terrorist faction within their midst, resulting in more nationwide unrest.
Until we can separate Hamas from Palestine, I don't see that peace is possible. And until Arafat exits stage left, I don't see that it is possible to separate Hamas from Palestine.