Exactly 20 years have passed since the Oslo accords were signed on the White House lawn. For all their shortcomings and ambiguities, the accords constituted a historic breakthrough in the century-old conflict between Jews and Arabs in Palestine. It was the first peace agreement between the two principal parties to the conflict: Israelis and Palestinians.

The accords represented real progress on three fronts: the Palestine Liberation Organisation recognised the state of Israel; Israel recognised the PLO as the representative of the Palestinian people; and both sides agreed to resolve their outstanding differences by peaceful means. Mutual recognition replaced mutual rejection. In short, this promised at least the beginning of a reconciliation between two bitterly antagonistic national movements. And the hesitant handshake between Yitzhak Rabin and Yasser Arafat clinched the historic compromise.

Critical to the architecture of Oslo was the notion of gradualism. The text did not address any of the key issues in this dispute: Jerusalem; the right of return of 1948 refugees; the status of Jewish settlements built on occupied Palestinian land; or the borders of the Palestinian entity. All these "permanent status" issues were deferred for negotiations towards the end of the five-year transition period. Basically, this was a modest experiment in Palestinian self-government, starting with the Gaza Strip and the West Bank town of Jericho.

The text did not promise or even mention an independent Palestinian state at the end of the transition period. The Palestinians believed that in return for giving up their claim to 78% of historic Palestine, they would gain an independent state in the remaining 22%, with a capital city in Jerusalem. They were to be bitterly disappointed.

Controversy surrounded Oslo from the moment it saw the light of day. The 21 October 1993 issue of the London Review of Books ran two articles; Edward Said put the case against in the first. He called the agreement "an instrument of Palestinian surrender, a Palestinian Versailles", arguing that it set aside international legality and compromised the fundamental national rights of the Palestinian people. It could not advance genuine Palestinian self-determination because that meant freedom, sovereignty, and equality, rather than perpetual subservience to Israel.

In my own article I put the case for Oslo. I believed that it would set in motion a gradual but irreversible process of Israeli withdrawal from the occupied territories and that it would pave the way to Palestinian statehood. From today's perspective, 20 years on, it is clear that Said was right in his analysis and I was wrong.

In 2000 the Oslo peace process broke down following the failure of the Camp David summit and the outbreak of the second intifada. Why? Israelis claim that the Palestinians made a strategic choice to return to violence and consequently there was no Palestinian partner for peace. As I see it, Palestinian violence was a contributory factor, but not the main cause. The fundamental reason was that Israel reneged on its side of the deal.

Sadly, the Jewish fanatic who assassinated Rabin in 1995 achieved his broader aim of derailing the peace train. In 1996 the rightwing Likud returned to power under the leadership of Binyamin Netanyahu. He made no effort to conceal his deep antagonism to Oslo, denouncing it as incompatible with Israel's right to security and with the historic right of the Jewish people to the whole land of Israel. And he spent his first three years as PM in a largely successful attempt to arrest, undermine, and subvert the accords concluded by his Labour predecessors.

Particularly destructive of the peace project was the policy of expanding Israeli settlements on occupied Palestinian territory. These settlements are illegal under international law and constitute a huge obstacle to peace. Building civilian settlements beyond the Green Line does not violate the letter of the Oslo accords but it most decidedly violates its spirit. As a result of settlement expansion the area available for a Palestinian state has been steadily shrinking to the point where a two-state solution is barely conceivable.

The so-called security barrier that Israel has been building on the West Bank since 2002 further encroaches on Palestinian land. Land-grabbing and peace-making do not go together: it is one or the other. Oslo is essentially a land-for-peace deal. By expanding settlements all Israeli governments, Labour as well as Likud, contributed massively to its breakdown.

The rate of settlement growth in the West Bank and Israeli-annexed East Jerusalem is staggering. At the end of 1993 there were 115,700 Israeli settlers in the occupied territories. Their number doubled during the following decade.

Today the number of Israeli settlers on the West Bank exceeds 350,000. There are an additional 300,000 Jews living in settlements across the pre-1967 border in East Jerusalem. Thousands more settlement homes are planned or under construction. Despite his best efforts, John Kerry, the US secretary of state, failed to get the Netanyahu government to accept a settlement freeze as a precondition for renewing the peace talks suspended in 2010. As long as Netanyahu remains in power, it is a safe bet that no breakthrough will be achieved in the new round of talks. He is the procrastinator par excellence, the double-faced prime minister who pretends to negotiate the partition of the pizza while continuing to gobble it up.

The Oslo accords had many faults, chief of which was the failure to proscribe settlement expansion while peace talks were in progress. But the agreement was not doomed to failure from the start, as its critics allege. Oslo faltered and eventually broke down because Likud-led governments negotiated in bad faith. This turned the much-vaunted peace process into a charade. In fact, it was worse than a charade: it provided Israel with just the cover it was looking for to continue to pursue with impunity its illegal and aggressive colonial project on the West Bank.

• Comments on this article are set to remain open for 24 hours from the time of publication but may be closed overnight