A double consensus is forming around Yasser Arafat: one, that the old man is dying and two, that he was a failure. The first assumption is, alas, all too plausible. The second is based almost entirely on an Israeli perspective.

That is not entirely to invalidate it. Israel has been sore pressed by events of the past decade or so since peace was first dangled so tantalisingly over the Middle East. Manifestly, whatever emerged from the 1993 Oslo accords was not peace, or even a lessening of violence. At best, the historic agreement brought only a cruelly unrealised hope of a lasting settlement. But to say Yasser Arafat is wholly responsible for crushing that hope, through his unwillingness to compromise, is wildly unfair.

Israel has not compromised either. Tens of thousands of settlers have poured into the West Bank, seizing land and destroying Palestinian homes and farms. The occupied territories have been relentlessly assaulted, and their residents systematically terrorised. The Palestinian economy, always pathetic, has been destroyed.

The justification for this brutality, and the main charge against Arafat, is that he failed to prevent assaults on Israel being launched from the territories nominally controlled by his Palestinian National Authority. The answer to that charge is that he was politically, militarily, and even morally unable to do any such thing.

Abu Amar, the old man, won his father-of-the-nation tag by being a fighter. His undisputed courage as a guerrilla leader was put into the shade by his extraordinary courage in accepting the basic premise of Oslo: the Palestinians would, for the first time, recognise Israel and accept an inferior state of their own.

Inferior, because it would comprise less than a quarter of the land of Palestine, and because that land would be the poorest and least productive. Inferior, because Israel would still be the regional superpower, and would dictate defence, economic and development issues. Inferior, not least, because Israel would control the water supplies.

All this Arafat swallowed. What he did not realise is that the Israelis saw Oslo not as a compromise, but as a victory. And as victors, they demanded more and more spoils: permanent sovereignty over Arafat’s beloved Jerusalem; a permanent settler presence in the West Bank; a permanent security cordon along the Jordan, and complete control of airspace and coastline. There was to be no question of any right of return for the Palestinian diaspora, nor any compensation for up to six million refugees and their descendants.

Arafat loved the theatricality of that famous White House handshake with Yitzhak Rabin. He adored being a global celebrity and Nobel laureate, and he enjoyed what panoply of state he could achieve in his flyblown Gaza City headquarters. But when the post-Oslo negotiations at last came to the crunch in the Egyptian resort of Taba at the end of 2000, he finally faced reality.

Many Israelis are genuinely bewildered Arafat did not grasp, with both hands, what the then prime minister, Ehud Barak, offered. The common cliche is Israel was prepared to give way to 95% of Palestinian demands. That was, and remains, a complete nonsense, as is the myth Arafat lacked the courage to accept.

He didn’t because he couldn’t. It would have meant giving up Jerusalem, giving up chunks of the West Bank, giving up dignity itself. It would have meant betraying the refugees, the most sensitive of all Palestinian issues. And in that winter of 2000-01, Palestinians were dying by the score in the intifada provoked by Ariel Sharon’s infamous walkabout in the Haram as-Sharif, Islam’s holiest site in Jerusalem. To have surrendered to Barak in that context, would have been political – and possibly literal – suicide.

Israelis were dying too, of course, in unprecedented numbers. The present ratio of death is 3.5 Palestinians for every Israeli; about 4,500 in all. However, it has always been a given in Israel that Jewish lives are more important than any others, and the death toll of the past four years has stunned, shocked and enraged Israelis.

There is a regrettably thin stratum of Israelis who recognise that Arafat embodies the best hope for a lasting settlement; a hope not likely to be offered by the non-entities who succeed him, or the militants who long for power. Now that Arafat has been effectively removed from the field of play, Israel seems to be convincing itself it doesn’t have to negotiate any more. Sharon will press ahead with his tokenist scheme to withdraw a handful of settlers from Gaza, and will claim that that gives him a ‘right’ to do what he wants in the West Bank. The old lopsided give and take – Palestinians give and Israel takes – will go on. And so will the bloodshed.

Arafat was never the wisest of leaders. He was a rotten administrator, and was utterly incapable of delegation. But the man who brought his people to the very edge of statehood, deserves better than the opprobrium being heaped on him at the very edge of death.

• Derek Brown was Guardian correspondent in Jerusalem, 1993-96