Once Sharon was elected, his first action was to form a government. Sharon wanted to create as broad a coalition as possible. He offered Prime Minister Barak the position of Defense Minister, but Barak declined. However, Shimon Peres agreed to become Foreign Minister. In the period before Sharon's government was sworn in, the embers of the Intifada continued to burn. Firing on Israeli settlements in Gaza became a daily event. Israel responded with a targeted attack on Massoud Ayyad, 53, whom Israel held responsible for a failed mortar bomb attack on a Jewish settlement in Gaza. The next day, an Arab bus driver who transported workers daily from Gaza to Ramle ran over a group of people, including soldiers, at a bus stop in Azur, killing eight of them.

On March 4th, a suicide bomber killed three Israelis in Netanya. On March 7th, the new government was sworn in. Sharon and the Israeli government were still hoping that Arafat would rein in the violence, but despite his positive words, Arafat did nothing.

Shortly after becoming Prime Minister, Sharon traveled to Washington to meet President George Bush. The two developed a strong rapport. Following their meeting, President Bush remarked:

I told him that our nation will not try to force peace, that we'll facilitate peace and that we will work with those responsible for peace.

Sharon was pleased that Bush accepted the principle that there would be no peace talks unless the violence ended.

On March 27th, a bombing in French Hill, Jerusalem, claimed the lives of 28 people, signaling a clear escalation in the situation. Despite various efforts to halt the fighting, none succeeded. Mohammed Dahlan, a leader within the Palestinian Authority, spoke to reporters and said:

Surrounded by Israeli troops and tanks, angered by economic and human losses, and possessing little hope that a full peace settlement is now possible—we are prepared for a long period of sacrifice. As far as the Palestinian people are concerned, death and life are the same at this point. This is a very, very dangerous stage to be at. We have nothing to lose.

On April 23rd, a suicide bomber killed and wounded dozens in Kfar Saba. On May 10th, two schoolboys from Tekoa, who had skipped class to go hiking in a nearby gorge, were found bludgeoned to death in a cave. A police spokesman reported that the two boys, Yaakov Mandel, 13, and Yosef Ishran, 14, had been battered to death with rocks. “Their heads were crushed,” the officer stated. The blood-stained rocks were found near the bodies in Wadi Haritun, a dry riverbed close to Tekoa in the Judean Desert south of Bethlehem. The police believe the boys were murdered following an apparent chance encounter with their attackers.