The Palestinian leader's portrayal by the west and Israel has been a barrier both to understanding the conflict and to peace

One year after Yasser Arafat's death, and he has passed into silent myth and legend. As with all great historical figures, the myth is both powerful and pervasive. Yet in Arafat's case, it possesses a peculiar driving force that frames the manner in which we see the present. Indeed, everything about the conflict between the Palestinians and Israel is shaped by this myth. In the west it is entirely a negative myth, cultivated by the press and parroted by political elites, diplomats and intellectuals. It is obvious why Israel would portray its enemy in such a bad light, but why did this negative myth take hold outside Israel with such strength and persuasion?

Myths have a function - they are both practical and convenient. They help to justify reasons to do things and they justify reasons not to do things. The myth of Arafat as the obstacle to peace gave Clinton his reasons after Camp David; to maintain the myth of himself as international peacemaker, he needed a scapegoat to blame for the collapse of the talks. Clinton underwrote the then Israeli prime minister Ehud Barak's portrayal of Arafat as a terrorist and an obstacle to peace, in order that Barak could be re-elected.

The myth instead gave rise to Ariel Sharon, as the Israeli public felt only a Sharon could deal with that mythical monster Arafat. It gave the neoconservative hawks in the US administration the opportunity to redesign the Middle East in harmony with the views of their ally Israel, and for the British government to absolve themselves from doing anything whatsoever. Instead they watched, some cheering, while a democratically elected leader was imprisoned for years and slowly killed, without apparently feeling any moral queasiness or shame. This myth made all that possible. Arafat the obstacle.

A year after his death, the claim that his removal would positively alter the political landscape and give the chance to Israel, the Palestinians and the international community to negotiate a settlement has proved false. And being false, it allowed an even more destructive reality to take hold. Sharon, without serious protest and much encouragement, has in the past year turned Gaza into the largest prison on earth, moved tens of thousands of settlers into the West Bank, and built an illegal wall across Palestinian land which encircles and starves Palestinian cities and farms. In fragmenting the land, he has further fragmented the Palestinian people who belong to it, both those under occupation and those in enforced exile as refugees. This was his aim all along. He saw Arafat as an obstacle to this ambition. With Arafat gone, he has indeed managed to achieve it. But he couldn't have done this without the negative myth's magnetic hold in the west.

What of the alternative myth of Arafat - the one that will eventually triumph in the history books? The one that will include just a fraction of the epic stories about him that most Palestinians grew up with? Arafat, for all his flaws and mistakes, stood for a just peace, based on a historic compromise. He believed in international law, in a two-state solution based on implementing UN resolution 242, and for a just settlement for refugees, the main victims of this conflict. His legitimacy came from more than the fact that he was democratically elected: he performed a historic purpose in the life of Palestinians, a purpose as yet unfulfilled. By representing his people's general will and collective spirit, he symbolised the absent state's sovereign institutions.

What he represented was the reason he was removed: that Palestinians are one people, whether living under military occupation or in refugee camps. They have a right to self-determination, and they have fought hard for their liberty for generations, which is also a right. For a people to negotiate their way out of an occupation by diplomatic means alone, when the occupier is determined to hold on to their land, has no successful precedent. On the other hand, examples of successful negotiations once the occupier has accepted he must relinquish another's country are legion. Arafat's own much-used example was De Gaulle's 1958 call for "la paix des braves" with the Algerian armed liberation movement, the FLN. Arafat represented an important reality - peace will come when freedom is achieved for the Palestinians, and not one minute before.

The negative myth of Arafat prevents any understanding of the conflict or how to resolve it. This is not a conflict healed by providing economic recovery to Palestinians, since their impoverishment is entirely due to an entrenched and permanent military occupation. It is not a holy war against Palestinian terrorists who seek the destruction of the Israeli state, nor excited speculation on the role a new Israeli Labour party leader might play. This is a battle over the right to call this conflict a conflict between two peoples: one that is oppressed, and the other that is denying them their right to be free. Recovering the true myth of the old man is the key to understanding who the Palestinians are, and how they will achieve their freedom.

· Karma Nabulsi is a politics fellow at St Edmund Hall, Oxford, and a former PLO representative