What was the Madrid Peace Conference ?
Following threats by the administration of George H.W. Bush to withhold $10 billion in loan guarantees unless Israel ends settlement construction, Israeli Prime Minister Shamir finally agreed to meet with Palestinian representatives - but not PLO officials, despite the fact that the PLO is considered the sole legitimate representative of the Palestinian people by the UN and international community. Talks between Palestinians based in the occupied territories, who are in close contact with PLO officials behind the scenes, began in Madrid in 1991. Soon afterwards, in an attempt to bypass the Palestinian representatives sent to Madrid, the Israeli government began secret negotiations with the PLO, weakened politically since the disaster of Israel's 1982 invasion of Lebanon and Arafat's support for Iraq during the first Gulf War, believing it will be more willing to compromise on issues such as settlement construction and fundamental Palestinian rights like the right of return for refugees expelled from their homes during Israel's creation in 1947-9.