In the first-ever elections held by Palestinians, Arafat was the overwhelming choice as president of the Palestinian Authority. In Israel, a massive bus bomb set off by Islamic extremists killed 25 and wounded dozens in the run-up to the prime minister election. Hard-line Likud Party leader Benjamin Netanyahu defeated Peres in a close race. Netanyahu and Arafat pledged to work toward a final peace treaty. The Israeli government decided later that year to end a freeze on construction in the occupied territories. Clashes continued between Palestinians and Jewish settlers.