Throughout his career after rising to the head of al-Fatah and especially since losing the Civil War in Jordan in 1970, Arafat's modus operandi has been to not adjust to changing conditions until he is physically forced to by losing military control over his surroundings. He has placed himself at the mercy of the Syrians (more than once), the Israelis, other Palestinians factions, and Arab supporters from outside the Levant. In each case, his celebrity has made it worth the while of his captors to become his protectors.
By always waiting until he is militarily defeated before taking any bold policy step, he has avoided bearing responsibility for any action which would make a large enough faction of Palestinians to call for his head. But at the same time, by never putting his neck on the line for a policy position, he has effectively conspired with the Israelis to keep the Palestinian political leadership completely ineffective.
The one goal for which Arafat's leadership-style is well-suited, is to allow him to die a natural death while still being acknowledged the leader of his people. Since he has now all but achieved that goal, perhaps the prospects for peace will improve.