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General elections were held in Israel on 29 May 1996. For the first time the Prime Minister was elected on a separate ballot from the remaining members of the Knesset.
The 1996 elections resulted in a surprise victory for Netanyahu by a margin of 29,457 votes, less than 1% of the total number of votes cast, and much smaller than the number of spoiled votes. This came after the initial exit polls had predicted a Peres win, spawning the phrase "went to sleep with Peres, woke up with Netanyahu." This election was Peres's fourth and last election defeat.
On 13 September 1993, Israel and the Palestine Liberation Organization (PLO) signed the Oslo Accords (a Declaration of Principles) on the South Lawn of the White House. The principles established objectives relating to a transfer of authority from Israel to an interim Palestinian authority, as a prelude to a final treaty establishing a Palestinian state.
On 25 July 1994, Jordan and Israel signed the Washington Declaration, which formally ended the state of war that had existed between them since 1948 and on 26 October the Israel–Jordan Treaty of Peace, witnessed by U.S. President Bill Clinton.
Prime Minister Yitzhak Rabin and PLO Chairman Yasser Arafat signed the Israeli–Palestinian Interim Agreement on the West Bank and the Gaza Strip on 28 September 1995, in Washington. The agreement allowed the PLO leadership to relocate to the occupied territories and granted autonomy to the Palestinians with talks to follow regarding final status. In return the Palestinians promised to abstain from use of terror and changed the Palestinian National Covenant, which had called for the expulsion of all Jews who migrated after 1917 and the elimination of Israel.