Mr Rabin has resisted calls to suspend peace talks with the Palestinians and has given the security forces a freer hand to track down extremists.
Heavily manned army roadblocks kept about 50,000 Palestinians from the West Bank and Gaza Strip from jobs in Israel yesterday and more than 500 Palestinians inside Israel illegally were arrested.
"We have chosen to fight and by all means. There are no limitations; for the security services - a free hand. We have taken off the gloves," said Efraim Sneh, Health Minister and a former West Bank commander, considered close to Mr Rabin.
Israelis and Palestinians have been disappointed since the peace agreement was signed in September1993. Mr Rabin led Israelis to believe they would be more secure. Suicide bombs in Tel Aviv last October and Beit Lid on Sunday have shown they are not. He promised to separate Jews and Arabs but allowed Israeli settlements to expand, so two hostile communities on the West Bank and in Gaza are sitting on top of one another.
On Sunday, the Israeli President, Ezer Weizman, said it was time to suspend talks unless the PLO chairman, Yasser Arafat, made a bigger effort to control Hamas and Islamic Jihad. Given that President Weizman was an early exponent of talks with the Palestinians, this looked like a blow below the belt. But it probably expresses majority opinion among Israelis.
The problem for Mr Rabin is that he has offended everybody. By not redeploying from West Bank towns, he showed Mr Arafat was unable to deliver much to his followers. But he still demanded the PLO quash the organisations behind the suicide bombers. This was unrealistic, as Israeli security has failed to do this on the West Bank, where it still controls security.
Not all the failures are Mr Rabin's fault. The genesis of the talks between Israel and the Palestinians was a decision taken by US President George Bush and Secretary of State James Baker during the Gulf crisis to put pressure on Israel to make concessions to the Palestinians by refusing to grant a $10bn (£6.5bn) loan guarantee. This led to the Madrid conference in 1991, the Oslo agreement and Israel's recognition of the PLO. Under President Clinton, however, the US has largely opted out.
Equally destabilising is the failure of Mr Arafat to set up an administration. Local Palestinian leaders have been marginalised. The imported leadership from exile in Tunis has a reputation for corruption and brutality. This has created a political vacuum that Hamas and Islamic Jihad have swiftly filled.
The main reason why talks continue is that nobody knows what else to do. Despite the calls by the right wing Likud leader, Benyamin Netanyahu, for tougher measures to stop bomb attacks, no one knows how to stop people who are prepared to kill themselves.
The head of Israel's internal security service, Shin Bet, told Mr Rabin yesterday that he would step down from his post on 1 March, when his term of duty expires. The chief revealed that his agents recently prevented five anti-Israeli attacks, including an attempted kidnapping of a soldier.
Mr Rabin may escape from his downward spiral. But his ambivalence over withdrawal from the West Bank and Gaza means he has increased friction over settlements and Israeli military control, which the agreement of 1993 was designed to remove.Reuse content