A year after the US-sponsored Israeli-Palestinian peace conference in Annapolis, the BBC looks at how things have changed on the ground and the progress made on both sides' commitments.
Many of the Annapolis commitments are re-affirmations of commitments under the so-called Road Map peace plan developed in 2002.
Despite the Annapolis agreement, the numbers of both Palestinians and Israelis killed in the conflict is already higher in 2008 than it was last year.
But this masks a substantial drop in the number of Palestinians killed in the West Bank - where the agreement is most relevant - although five Israelis died there in both 2007 and in 2008.
Palestinian Authority moves to stop militant activity in the West Bank have been somewhat overshadowed by a surge in attacks by residents of East Jerusalem, where Israel does not allow the PA to operate.
At least 11 of the 16 Israelis killed inside Israel in 2008 died in attacks by Palestinians from East Jerusalem.
The Annapolis agreement is not recognised by the militant group Hamas, which seized control of the Gaza Strip in June 2007.
While the PA has been attempting to curb militant activity in the West Bank, deaths in Gaza rose on both sides in 2008.
These occurred as Israeli forces clashed with Hamas and other militant groups firing rockets into southern Israel.
However, a truce cut down Palestinian rocket fire and Israeli operations in Gaza significantly for much of the second half of 2008.
DISMANTLING PALESTINIAN MILITANT INFRASTRUCTURE
Under the road map, the Palestinian Authority was committed to "the dismantlement of terrorist capabilities and infrastructure".
The Palestinian Authority and international community have sought to restore the PA security forces.
A $25m US-backed project has seen at least 1,200 security personnel sent to Jordan for training, some of whom have been deployed in previous militia strongholds such as Jenin and Nablus.
And at least 500 police have been trained as part of 6.4m euro EU initiative to help the PA restore law and order in the West Bank.
Some 350 former militants are participating in amnesty programmes where they are expected to lay down their weapons in exchange for Israel removing them from wanted lists.
PA security forces have also arrested hundreds of suspected Hamas supporters and operatives.
The exact numbers detained are not known and human rights groups have raised concerns about arbitrary and warrantless arrests, and what they say is an increase in torture.
FREEZING ISRAELI SETTLEMENT ACTIVITY
The road map also calls for a total freeze on building in settlements in the West Bank, which are considered illegal under international law.
Peace Now, which monitors building in the settlements, has reported a surge in activity since Annapolis, for example:
• In total, construction has begun on 1,223 private and state-backed housing units in the West Bank since December 2008.
• Between January and May 2008, the Israeli Housing Ministry initiated construction on 433 new housing units, compared to just 240 in the same period the previous year.
• 417 tenders for construction in settlements were published between January and August 2008, compared to just 65 in 2007.
In addition, the road map demands the removal of all outposts - settlements deemed illegal under Israeli law - established since March 2001.
None that were in place at the time of the Annapolis agreement have been removed, although the Israeli military has razed a number of structures added to existing outposts or built as attempts to start new ones.
According to Peace Now, 125 new structures have been added to existing outposts since Annapolis.
Under the roadmap Israel was committed to ease its network of checkpoints and road blocks that restrict the movement of people and goods in the West Bank and Gaza, in order to improve humanitarian conditions.
Additional pressure has come from the US and Tony Blair, the envoy of the Middle East quartet made up of the US, EU, UN and Russia, which is seeking to revive the West Bank's economy.
The Israeli Defense Forces say they removed at least 113 roadblocks and checkpoints in 2008 and eased movement through seven "high-usage" crossings.
They dispute UN claims that new obstacles have been added and the total has increased from 563 at the time of the Annapolis agreement to 630 in September 2008 - up about 12%.
The IDF says the discrepancy is due to different methods of counting the complex mixture of obstacles which range from simple earth mounds to established military installations.
While the agency says the situation has improved in some localities, particularly because of the opening of three key crossings, it says that overall, in 2008, "an ever increasing number of Israeli obstacles" have been "causing further social and economic fragmentation".
In the wake of the Annapolis agreement, the quartet launched a drive to boost the flagging Palestinian economy - in which GDP per capita is 30% less than in 1999.
But the World Bank says Israel has "not relaxed its closure regime" and has "increased economic restrictions as it expands settlements", and "as a result, Palestinian economic growth has been flat and the economy has continued to hollow out".
Overall, the IMF estimates the Palestinian economy shrunk by 0.5% in 2007, and forecasts growth of 0.8% in 2008 - well below the target of 3.5%, which assumed freedom of movement would be improved.
This is partly because the Israeli blockade of Gaza, which has allowed little but basic humanitarian goods in and virtually no exports out, has devastated the Strip's economy.
Figures collated by Israel in November show some positive trends in the West Bank in 2008, including a 24% rise in the average daily wage and a 3% drop in unemployment.
And a September World Bank report said there was some evidence that the West Bank "could be experiencing a small increase in economic activity", with increased tourism to Bethlehem and growth in freight transport.
But it painted a general picture of an aid-dependent economy, severely affected by land shortages and other limitations, in which there have been few new private investments.
In addition, the Bank said only about $300m of a planned $500m would be spent on development projects, because of "economic and security restrictions".