Twenty-five years ago today the Oslo accord was signed by Israel’s prime minister, Yitzhak Rabin, and PLO chairman Yasser Arafat in the Rose Garden of the White House, with Bill Clinton acting as an enthusiastic master of ceremonies. Despite its many shortcomings, the accord represented a historic compromise between the Jewish and the Palestinian national liberation movements, and it was clinched with a hesitant handshake between the two leaders.

Mutual rejection was replaced by mutual recognition. Gaza and the West Bank city of Jericho were placed under the control of the PLO as a first step in a gradual process that was intended to lead to the resolution of all the outstanding issues between the two sides. It was a moment of high drama and high hopes.

The PLO saw the Oslo accord as a vehicle to national self-determination in the territories occupied by Israel in the June 1967 war. But it was not to be. Israel used the accord not to end but to repackage the occupation. The person primarily responsible for dashing the hopes pinned on the accord was not Arafat, as Israeli propaganda repeatedly claimed, but Benjamin Netanyahu.

The Oslo peace process had many ups and downs, but it was finally abandoned after the failure of a US-sponsored round of talks in 2014 when Netanyahu was prime minister. John Kerry, Obama’s secretary of state, could not have been more even-handed or more determined to broker a peace deal. But it was an exercise in futility. This time, even the pro-Israeli American peace-processors pointed the finger of blame at Israel. So why did the Oslo peace process fail?

There are two radically different explanations. Netanyahu maintains that the Oslo accord was doomed to failure from the start because it was incompatible with Israeli security and with the historic right of the Jewish people to the whole land of Israel, which includes Judea and Samaria, the biblical names of the West Bank. My view is that the Oslo accord was a modest step in the right direction, but it was killed when the rightwing Likud party returned to power under Netanyahu.

As leader of the opposition, Netanyahu spearheaded the attack on the Oslo accord when it was first presented for a vote in the Knesset. He accused Rabin of being a worse leader than Neville Chamberlain, because Chamberlain put another nation in danger, whereas Rabin did it to his own nation.

Another major landmark on the road to peace was the Oslo II accord of September 1995. Netanyahu denounced it as a surrender to terrorists and a national humiliation, and he vowed to bring down the government. He gave an inflammatory speech from the grandstand of a mass rally in Jerusalem in which demonstrators displayed an effigy of Rabin in SS uniform. And he continued to play an active part in a campaign of incitement against the Labour government. Rabin was assassinated in November 1995.

Leah, Rabin’s widow, refused to shake Netanyahu’s hand when he came to console her at the funeral. Yet she received Yasser Arafat at her home when he came to convey his condolences. Arafat’s handshake, she explained, symbolised for her the hope for peace, whereas Netanyahu’s handshake represented no such hope.

Netanyahu defeated Shimon Peres by a margin of less than 1% in the election of May 1996 and immediately set about nullifying the peace legacy of his Labour predecessors, spending his three years in power in a successful attempt to freeze, distort, subvert, and undermine the Oslo accords. He treated the Palestinian Authority not as an equal partner on the road to peace but as a defective instrument of Israeli security. The expansion of Jewish settlements on the West Bank proceeded apace, in flagrant violation of the spirit, if not the letter, of Oslo. The so-called peace process was a charade: all process and no peace. In fact, it was worse than a charade for it gave Israel just the cover it needed to pursue the aggressive colonial project on the West Bank.

In his second term as prime minister, under strong American pressure, Netanyahu grudgingly conceded the need for a Palestinian state but his version of such a state amounted to a series of demilitarised cantons without territorial contiguity. Moreover, he added a new condition: the Palestinians had to recognise Israel as the nation-state of the Jewish people before any agreement was reached. Netanyahu stipulated this condition, knowing that no Palestinian leader could possibly accept it because it would legitimise the Zionist project, the very project that continues to deny statehood to the Palestinians.

Likud’s platform never allowed for a Palestinian state, even on these ludicrous terms. In the lead up to the 2015 elections, Netanyahu reverted to his habitual rejectionism. It was not for nothing that he was known as Israel’s relentless refusenik. He stated categorically that there would be no Palestinian state on his watch. He urged the Jewish electors to get out and vote because the Arabs were going to the polling stations “in droves”. The Arabs in question were not the Palestinian inhabitants of the West Bank who have no political rights at all but the Palestinian citizens of the state of Israel who, in theory at least, are supposed to enjoy complete equality with the state’s Jewish citizens. Equality is, of course, a crucial ingredient of democracy.

As Ahmad Tibi, the Palestinian member of the Knesset, has often remarked, Israel is a democracy for the Jews, but a Jewish state for the Arabs. Israel within its original borders is still a democracy in the narrow sense that its Palestinian citizens have the right to vote. Greater Israel, Israel plus its colonies on the West Bank, is emphatically not a democracy; it is an ethnocracy, a political system in which one ethnic group rules over another. There is another name for this state of affairs – apartheid.

Any doubt on this score was finally removed by the recent law which declares Israel to be “the nation-state of the Jewish people”. As a “basic law”, this becomes part of the country’s constitution. It asserts that the Jewish people have an exclusive right to national self-determination in the state of Israel. This law stands in complete contradiction to the 1948 declaration of independence, which recognises the full equality of all the state’s citizens “without distinction of religion, race, or sex”. Arabic was demoted to a “special language”, from being an official language alongside Hebrew.

Netanyahu has radically reconfigured Israel as the nation-state of the Jewish people, rather than a Jewish and a democratic state. As long as the government that introduced this law stays in power, any voluntary agreement between Israel and the Palestinians will remain a pipe dream.

What is striking about Netanyahu is that in the course of his long political career, his views have hardly evolved at all. Yitzhak Shamir, the hardline Likud leader and prime minister, described Netanyahu as “shallow, vain, self-destructive, and prone to pressure”. Shamir maintained that peace is an illusion because whatever the Arabs may say in public, their real aim will always be to throw the Jews into the sea. His favourite saying was “the Arabs are the same Arabs and the sea is the same sea”. Less well known is his remark that “the sea is the same sea and Netanyahu is the same Netanyahu”.

• Avi Shlaim is an emeritus professor of international relations at Oxford University and the author of The Iron Wall: Israel and the Arab World