The rate of suicide bombings is way down. While there have been 87 such attacks in the last 30 months (about three a month on average), killing over 300 Israelis, counter terror measures have reduced the rate of attacks by over 90 percent (to less than one a month). Better intelligence work and constant raids to arrest or kill the members of the teams that recruit, train and transport the suicide bombing volunteers had reduced the number of attacks. Better security had stopped more of those attacks that do get launched. The army and police are also hunting down the leaders of groups that have led successful attacks in the past.
The Palestinians are trying to establish a new leadership that can negotiate a new peace deal with Israel. Yassir Arafat, who has led the Palestinians for decades, is seen as a liar and deceiver by the Israelis. So the Palestinians are trying to appoint a prime minister who would serve along Arafat as "president." But Arafat is resisting giving the prime minister any real power. If he does not relent, Israel will not want to negotiate and deal with a figurehead prime minister. Most Palestinians are ready for peace, but the radical groups are not, so the war goes on.
The biggest Palestinian threat now is from home made Qassam rockets. These have a range of about 12 kilometers and a 10-11 pound explosive warhead. However, they have no guidance system and often miss large towns they are aimed at.