Though the Prime Minister ordered Jews from the settlement of Esrat to stop building on one piece of land, claimed by Arabs from the village of al-Khader, he announced in the same breath that the settlers could continue building on another piece of disputed land nearby. Even as Mr Rabin was speaking, the settlers' bulldozers continued to plough up the hill in question and an Israeli military encampment was being set up.
Throughout the day the Palestinians of al-Khader, whose protests have been entirely passive, were herded away from the site by hundreds of Israeli soldiers shouting orders through megaphones and wearing riot gear. Later they were barricaded inside their village by lines of soldiers and military vehicles.
Mr Rabin's announcement yesterday looks unlikely to pacify either side and fails to address any of the fundamental issues of claims to land in the West Bank. The Prime Minister said he had made his decision "in the interests of peace", adding: "Israel does not want a bi-national state".
The Palestinians of al-Khader were able to claim a small victory, in that they had saved their hill from the bulldozers for now and had given publicity to Israel's continuing settlement plans.
However, Mr Rabin said nothing to undermine the settlers' claim that the hill is Israeli "state land" and therefore available for Jewish building. Furthermore, the Palestinians of al-Khader, who have documents proving ownership for scores of years, will remain barred from access to their hill and prevented from cultivating it or building on it.
Because the new piece of land given to the Esrat building project is closer to the existing settlement, Israeli officials hope it can be disguised as a "settlement expansion" rather than a "new settlement" and, therefore, that it will less overtly contravene the so-called "settlement freeze".
However, last night Palestinians said there would be protests over the ownership of this land, too. Already al-Khader has lost 1,200 acres to Esrat.
The settlers were also angered by Mr Rabin's announcement. Benjamin Netanyahu, leader of the right-wing nationalist Likud opposition party, which promoted massive expansion of settlements until its defeat in the 1992 elections, accused Mr Rabin of givingin to Yasser Arafat, the chairman of the Palestine Liberation Organisation. "Arafat threatens and Rabin capitulates," said Mr Netanyahu.
However, settler leaders all over the West Bank said they intended to go ahead with building on so-called "state land" apportioned to them, and there was nothing in Mr Rabin's comments to suggests these programmes will stop.