Bush, as any President of the U.S. would, has a lot of influence with Israel. He does not, however, have any control. Everything the Israelis do, they do with or without our approval. Bush's only part in the ultimate decision is to look good to other Arab nations. He should have told Arafat after the Israelis restrained themselves by not going into Gaza, "This is it. You have an opportunity to end the violence and work for a peaceful solution. If you cannot control this situation which is under complete control as of now, then the U.S. will step back. We will not interfere or judge in any way with what Israel may decide to do. This is our last hope for peace. Seize this opportunity before it's too late."
We all know the "Palestinians" won't stop without being crushed militarily. They may pause for a time, but they won't stop. So, Bush had a chance to offer Arafat another shot at peace before the inevitable took place. He could have responded to any Arab criticism, any liberal criticism that he gave them a chance and they threw it away. THEY made the choice to NOT work for peace. That last line would have been repeated by everyone in his administration and by himself over and over. It would sink in....
Alas, he has not done the simple thing, the obvious thing. No, he's listened to the State Department again.