. The commentary addresses these and other obstacles, but it also notes the important changes that have occurred, making resolution of the conflict possible. These include the pragmatic 1988 PLO decision to create a state next to the state of Israel in the West Bank and Gaza, with a capital in East Jerusalem; the exchange of letters of mutual recognition between Chairman Arafat and Prime Minister Rabin that preceded the 1993 Oslo Principles, and the Arab Peace Initiative of 2002.