Yasser Arafat isn't dead yet. The "blood disorder" that forced him to desert his besieged headquarters in Ramallah and fly to Paris for medical treatment may not kill him, but he is probably never going home again, and his long reign as the undisputed leader of the Palestinian people is certainly over. So it is time to write his political obituary, if not his personal one.

He should have died at least ten years ago, of course. It would have been better for his reputation, for he never had the skills to run a proto-state like the Palestinian Authority: even as "President" of the PA, he remained at heart a guerilla chieftain who ruled through cronies and relatives, coopted his opponents with bribes of one sort or another, and never failed to appoint at least two rivals to any position of power.

It would also have been better for peace in the region, for a more astute Palestinian leader might just have pulled off a final peace agreement at the Camp David talks with Israeli prime minister Ehud Barak in 2000. It was already late in the game, for the 1995 assassination of Israeli prime minister Yitzhak Rabin, Arafat's partner for peace in the Oslo Accords, and the subsequent delaying tactics of prime minister Binyamin Netanyahu in 1996-99, used up most of the available political time and patience, but a more flexible and imaginative man than Arafat might just have managed it.

Arafat didn't. He baulked at the fact that the Israelis would put none of their proposals into writing (because Barak's cabinet was already disintegrating back home over the scale of the concessions he was offering).

He was utterly unprepared psychologically for the fact that a final deal would mean that the overwhelming majority of Palestinian refugees would never see their ancestral homes again (although everybody else had known it for a decade).

Arafat was too cautious, and so the deal failed. A month later, Ariel Sharon marched onto the square in front of al-Aqsa mosque in Jerusalem guarded by hundreds of Israeli soldiers and snipers, with the manifest intention of provoking a violent Palestinian response. The Palestinians threw rocks, the snipers opened fire, and that triggered the intifada, just as Sharon (and maybe Barak too, by that time) intended. Four years later, all the peace plans lie in ruins and nothing awaits the Palestinians and the Israelis but endless violence.

So what did Arafat do right? Just two things, but they were big ones. First, he broke the hold of Arab governments who tried to control the Palestinian resistance movements for their own purposes. Then, even more importantly, he made the whole world acknowledge the existence of the Palestinian nation. He did that, for the most part, by successful acts of terrorism.

When Arafat created the Fatah guerilla movement in 1959, the Palestinian refugees who had fled or been driven from their homes in 1948 in what is now Israel were known simply as "refugees": stateless Arabs who could theoretically be "resettled" anywhere. Arab governments resisted this definition, but in the West it was universal. Arafat changed all that.

The key event in his life was the Six-Day War of 1967, in which Israel conquered the West Bank and the Gaza Strip, where most of the 1948 "refugees" had ended up. In response to that disaster, he took Fatah into the Palestinian Liberation Organisation in 1968, became the PLO's leader, and launched the campaign of international terrorism that made him famous.

It was universally condemned in the West, and all the authorities vowed that terrorism would never succeed, but by the time Arafat called off the campaign in 1989 he had achieved his goal. The world no longer talked about "refugees"; it talked about "Palestinians", and just to give them that name implicitly recognised their right to a particular territory. US and Israeli recognition of Arafat as a valid negotiating partner, the Oslo Accords of 1993, and the peace negotiations that took up most of the 1990s were the result.

They failed, and Arafat bears a share (though only a share) of the blame. As he departs from power and perhaps from the land of the living, the future of the Palestinians and the Israelis has rarely looked grimmer. But the history of the future is just as long as the history of the past; we just don't know it yet. There is still hope, and the historians of the future may be kinder to Yasser Arafat than the judgement of his contemporaries.