Following a series of negotiations, the Palestinian Authority (PA) was established; an entity that willingly took on the role of managing the daily lives of the inhabitants in the Occupied Territories, while Israel maintained control of more than 80 percent of the land. Within a matter of months the civil institutions needed to administer populations in modern societies -- inter alia education, health and welfare -- were passed from Israel to the hands of the fledgling authority, which was also given some limited form of sovereignty. Thus, without renouncing its right to rule the West Bank and Gaza, Israel transferred responsibility for the residents to a subcontractor of sorts -- the PA -- and in this way dramatically reduced the cost of the occupation.
http://www.counterpunch.com/gordon04082005.html