A poll showed 74 per cent of Israelis approve of the agreement reached with the Palestinians and Americans at the nine-day summit in Maryland.
The Israeli leader has achieved his main aims of watering down the Oslo accords of 1993, bettering his chances of re-election and building more settlements on the West Bank.
Extreme Jewish settlers had promised mass demonstrations against the partial Israeli withdrawal yesterday, but the turn-out of their supporters was poor.
One explanation for this is that settlements are now expanding at a faster rate than at any time since Israel captured the West Bank in 1967.
Ghassan Khatib, a Palestinian commentator, said: "Settlement expansion is reaching a point where it makes a real Palestinian state impossible. Ironically, this is happening when such a state is becoming acceptable to the US."
The Palestinian leadership is claiming this improvement in relations with the US was one of their main gains in Wye. President Bill Clinton treated the Israeli and Palestinian delegations more or less equally. The CIA, not Israel, will monitor the Palestinian Authority's compliance with the plan to arrest Islamic militants, reduce the size of the Palestinian police force and confiscate arms.
Most important, President Clinton is to visit the Palestine National Council, probably meeting in Gaza or Ramallah, later in the year. This is taken as a sign that American involvement with the implementation of the Wye agreement will be continuing and Mr Netanyahu will not be able to renege on his commitments.
He may not wish to do so. Ever since he was elected Prime Minister in 1996, the thrust of the Labour party's attack on him has been that he could not agree a peace with the Palestinians. Now that he has done so he has stolen the main plank in their political platform, leaving Labour vulnerable to an early election.
Yasser Arafat's supporters claim that his achievement is even more striking. The US and Israel are not far from conceding the Palestinian right to self-determination. His relations with Washington are warm. It is a long way from 1982, when the US gave a green light for the Israeli invasion of Lebanon to wipe out the Palestine Liberation Organisation in Beirut.
This diplomatic victory by Mr Arafat may not convert into much on the ground for the 2.7 million Palestinians living in the West Bank and Gaza. The Palestinian Authority will increase the area under its total control by 15.2 per cent, but this only translates into an extra 250 square miles ruled by Mr Arafat.
What matters for the Palestinians is "continuity" of territory. The decline in the economy of the West Bank has come because each island of Palestinian territory is isolated from the next by Israeli checkpoints. This will continue to be true.
A real breakthrough for the Palestinians would be freedom to travel between Gaza and the West Bank, which is still under discussion. This would relieve the sense of siege of the 1 million Gazans.
Some issues are less important than they look. Mr Arafat is to reduce the size of his peace force from 40,000 to 24,000, but the expansion had come largely for economic reasons during the Israeli closure of 1996. Confiscation of illegal weapons will cause more friction, because so many Palestinians have a personal weapon.
Hamas, the Islamic militant organisation, will probably not resist the increased repression by Mr Arafat. It still believes that in the long term the Palestinian Authority is growing politically weaker because it cannot deliver benefits to ordinary Palestinians.
The most interesting change at Wye is in American policy. Victory over Iraq gave the US hegemony over the Middle East in 1991. For five years it was virtually uncontested. But since 1996 it has looked increasingly shaky. Containment of Iraq and Iran began to break down.
Above all, the US had failed to deliver on a deal between Israel and the Palestinians after Mr Netanyahu was elected two years ago. Personally loathed by the White House and many senior US officials, the Israeli leader thought he was invulnerable to US pressure because of the support he could get from the American Jewish community.
At Wye he nevertheless came under sustained US pressure. The origin of this may have been fortuitous. David Makovsky, an Israeli commentator, writes: "Israel believed that Clinton would support any deal in order to ring up a victory during his tough times in Congress, even if only a partial victory." But by the time Wye began Mr Clinton's political fortunes had begun to mend. He could be tougher with Israel than Mr Netanyahu expected.
The more sympathetic stance of the US strengthens Mr Arafat, but the future of relations between Israelis and Palestinians is being determined by bulldozers and cranes at work across the West Bank and not by any diplomatic accord.Reuse content