The current peace process (called "the road map") has reduced terrorist attacks and, as a result, reduced the number of Israeli raids into Palestinian territory and the battles between Palestinian terrorists and Israeli troops. But the Israelis continue to build their "security wall" (actually a system with multiple walls and sensors) to separate Israeli and Palestinian territory. But the Palestinians feel that this will become a permanent border. The Palestinians are also vexed that the wall incorporates many Jewish settlements in Palestinian territory. The 900 kilometer wall will cost $1.8 billion. Israeli intelligence says that the lack of Israeli raids has enabled the terrorist organizations to openly rebuild their infrastructure, recruit and train people. This violates the peace process, as the Palestinian terrorist organizations are supposed to be disarmed, but there is no sign that this is going to happen. There's a similar situation with the Jewish settlements in Palestinian territory. The current Israeli government says it is willing to remove a few, but not all, of them. 

The death toll in 35 months of violence is now 3,386 (2,552 Palestinian and 773 Israelis plus some foreigners). Since the three month cease-fire began on June 29th, 12 people have been killed.