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Following the riots, a high degree of tension between Jewish and Arab citizens and distrust between the Arab citizens and police were widespread. An investigation committee, headed by Supreme Court Justice Theodor Or, reviewed the violent riots and found that the police were poorly prepared to handle such riots and charged major officers with bad conduct. The Or Commission reprimanded Prime Minister Ehud Barak and recommended Shlomo Ben-Ami, then the Internal Security Minister, not serve again as Minister of Public Security. The committee also blamed Arab leaders and Knesset members for contributing to inflaming the atmosphere and making the violence more severe.
On 12 October, PA police arrested two Israeli reservists who had accidentally entered Ramallah, where in the preceding weeks a hundred Palestinians had been killed, nearly two dozen of them minors. Rumours quickly spread that Israeli undercover agents were in the building, and an angry crowd of more than 1,000 Palestinians gathered in front of the station calling for their death. Both soldiers were beaten, stabbed, and disembowelled, and one body was set on fire. An Italian television crew captured the killings on video and then broadcast the tape internationally. A British journalist had his camera destroyed by rioters as he attempted to take a picture. The brutality of the killings shocked the Israeli public, who saw it as proof of a deep-seated Palestinian hatred of Israel and Jews. In response, Israel launched a series of retaliatory air-strikes against Palestinian Authority targets in the West Bank and Gaza Strip. The police station where the lynching had taken place was evacuated and destroyed in these operations. Israel later tracked down and arrested those responsible for killing the soldiers.
Clashes between Israeli forces and Palestinians increased sharply on 1 November, when three Israeli soldiers and six Palestinians were killed, and four IDF soldiers and 140 Palestinians were wounded. In subsequent days, casualties increased as the IDF attempted to restore order, with clashes occurring every day in November. A total of 122 Palestinians and 22 Israelis were killed. On 27 November, the first day of Ramadan, Israel eased restrictions on the passage of goods and fuel through the Karni crossing. That same day, the Jerusalem settlement of Gilo came under Palestinian heavy machine gun fire from Beit Jala. Israel tightened restrictions a week later, and Palestinians continued to clash with the IDF and Israeli settlers, with a total of 51 Palestinians and 8 Israelis killed in December. In a last attempt by the Clinton administration to achieve a peace deal between Israelis and Palestinians, a summit was planned in Sharm el-Sheikh in December. However, Israeli Prime Minister Barak decided not to attend after the Palestinians delayed their acceptance of the Clinton Parameters.
The Taba Summit between Israel and the Palestinian Authority was held from 21 to 27 January 2001, at Taba in the Sinai peninsula. Israeli prime minister Ehud Barak and Palestinian President Yasser Arafat came closer to reaching a final settlement than any previous or subsequent peace talks yet ultimately failed to achieve their goals.
On 17 January 2001, Israeli teenager Ofir Rahum was murdered after being lured into Ramallah by a 24-year-old Palestinian, Mona Jaud Awana, a member of Fatah's Tanzim. She had contacted Ofir on the internet and engaged in an online romance with him for several months. She eventually convinced him to drive to Ramallah to meet her, where he was instead ambushed by three Palestinian gunmen and shot over fifteen times. Awana was later arrested in a massive military and police operation, and imprisoned for life. Five other Israelis were killed in January, along with eighteen Palestinians.
Ariel Sharon, at the time from the Likud party, ran against Ehud Barak from the Labour party. Sharon was elected Israeli Prime Minister 6 February 2001 in the 2001 special election to the Prime Ministership. Sharon refused to meet in person with Yasser Arafat.
Violence in March resulted in the deaths of 8 Israelis, mostly civilians, and 26 Palestinians. In Hebron, a Palestinian sniper killed ten-month-old Israeli baby Shalhevet Pass. The murder shocked the Israeli public. According to the Israel police investigation the sniper aimed deliberately at the baby.
On 30 April 2001, seven Palestinian militants were killed in an explosion, one of them a participant in Ofir Rahum's murder. The IDF refused to confirm or deny Palestinian accusations that it was responsible.
On 7 May 2001, IDF naval commandos captured the vessel Santorini, which was sailing in international waters towards Palestinian Authority-controlled Gaza. The ship was laden with weaponry. The Israeli investigation that followed alleged that the shipment had been purchased by Ahmed Jibril's Popular Front for the Liberation of Palestine - General Command (PFLP-GC). The ship's value and that of its cargo was estimated at $10 million. The crew was reportedly planning to unload the cargo of weapons-filled barrels—carefully sealed and waterproofed along with their contents—at a prearranged location off the Gaza coast, where the Palestinian Authority would recover it.
On 8 May 2001, two Israeli teenagers, Yaakov "Koby" Mandell (13) and Yosef Ishran (14), were kidnapped while hiking near their village. Their bodies were discovered the next morning in a cave near where they lived. USA Today reported that, according to the police, both boys had "been bound, stabbed and beaten to death with rocks." The newspaper continued, "The walls of the cave in the Judean Desert were covered with the boys' blood, reportedly smeared there by the killers."
After a suicide bombing struck Netanya on 18 May 2001, Israel for the first time since 1967 used warplanes to attack Palestinian Authority targets in the West Bank and Gaza, killing 12 Palestinians. In the past, airstrikes had been carried out with helicopter gunships.
On 1 June 2001, an Islamic Jihad suicide bomber detonated himself in the Tel Aviv coastline Dolphinarium dancing club. Twenty-one Israeli civilians, most of them high school students, were killed and 132 injured. The attack significantly hampered American attempts to negotiate cease-fire.
The 12 June Murder of Georgios Tsibouktzakis by Palestinian snipers was later tied to Marwan Barghouti.
A total of 469 Palestinians and 199 Israelis were killed in 2001. Amnesty International's report on the first year of the Intifada states:
The overwhelming majority of cases of unlawful killings and injuries in Israel and the Occupied Territories have been committed by the IDF using excessive force. In particular, the IDF have used US-supplied helicopters in punitive rocket attacks where there was no imminent danger to life. Israel has also used helicopter gunships to carry out extrajudicial executions and to fire at targets that resulted in the killing of civilians, including children. ... Hamas and Islamic Jihad have frequently placed bombs in public places, usually within Israel, in order to kill and maim large numbers of Israeli civilians in a random manner. Both organizations have fostered a cult of martyrdom and frequently use suicide bombers.
Palestinian terrorists committed a number of suicide attacks later in 2001, among them the Sbarro restaurant massacre, with 15 civilian casualties (including 7 children); the Nahariya train station suicide bombing and the Pardes Hanna bus bombing, both with 3 civilian casualties; the Ben Yehuda Street bombing with 11 civilian deaths, many of them children; and the Haifa bus 16 suicide bombing, with 15 civilian casualties.
In January 2002, the IDF Shayetet 13 naval commandos captured the Karine A, a freighter carrying weapons from Iran towards Israel, believed to be intended for Palestinian militant use against Israel. It was discovered that top officials in the Palestinian Authority were involved in the smuggling, with the Israelis pointing the finger towards Yasser Arafat as also being involved.
Palestinians launched a spate of suicide bombings and attacks against Israel, aimed mostly at civilians. On 3 March, a Palestinian sniper killed 10 Israeli soldiers and settlers and wounded 4 at a checkpoint near Ofra, using an M1 Carbine. He was later arrested and sentenced to life imprisonment. The rate of the attacks increased, and was at its highest in March 2002.
In addition to numerous shooting and grenade attacks, the month saw 15 suicide bombings carried out in Israel — an average of one bombing every two days. The high rate of attacks caused widespread fear throughout Israel and serious disruption of daily life throughout the country. March 2002 became known in Israel as "Black March." On 12 March United Nations Security Council Resolution 1397 was passed, which reaffirmed a Two-state solution and laid the groundwork for a Road map for peace.
On 27 March, the wave of violence culminated with a suicide bombing during a Passover celebration at the Park Hotel in Netanya in which 30 people were killed. The attack became known as the Passover massacre. In total, around 130 Israelis, mostly civilians, were killed in Palestinian attacks during March 2002. On 28 March, Arab leaders, whose constituencies were exposed to detailed television coverage of the violence in the conflict, set out a comprehensive Arab Peace Initiative that was endorsed by Arafat, but virtually ignoring by Israel.
On 29 March, Israel launched Operation Defensive Shield, which lasted until 3 May. The IDF made sweeping incursions throughout the West Bank, and into numerous Palestinian cities. Arafat was put under siege in his Ramallah compound. The UN estimated that 497 Palestinians were killed and 1,447 wounded by the Israeli incursion from 1 March to 7 May. A UN report cleared Israel of allegations of massacre, but criticized it for using excessive force on the civilian population. Israeli forces also arrested 4,258 Palestinians during the operation. Israeli casualties during the operation totaled 30 dead and 127 wounded. The operation culminated with the recapturing of Palestinian Authority controlled areas.
Between 2 and 11 April, a siege and fierce fighting took place in the Palestinian refugee camp of the city of Jenin. The camp was targeted during Operation Defensive Shield after Israel determined that it had "served as a launch site for numerous terrorist attacks against both Israeli civilians and Israeli towns and villages in the area." The Jenin battle became a flashpoint for both sides, and saw fierce urban combat as Israeli infantry supported by armor and attack helicopters fought to clear the camp of Palestinian militants. The battle was eventually won by the IDF, after it employed a dozen Caterpillar D9 armored bulldozers to clear Palestinian booby traps, detonate explosive charges, and raze buildings and gun-posts; the bulldozers proved impervious to attacks by Palestinian militants.