Rather than hurting the peace process, Netanyahu probably helped it. First of all, his administration boasted in late 1998 that more Palestinians were employed in Israel than any time since 1992. Also terror deaths during Netanyahu’s term as PM, were down significantly. When Israelis voted for Barak over Netanyahu in 1999, they likely didn’t consider terrorism a major problem. Netanyahu’s term in office made it appear safe for Israel to return to the peace process.

So when Israel voted for Netanyahu it was a reaction that the peace process had brought terror, not peace. It was a reasonable conclusion since there was no Israeli government that had been more conciliatory towards the Palestinians (at that time) than Shimon Peres’s and the retreats of the Peres government led to more terror not less.