Israel and Lebanon
The PLO became increasingly powerful in Southern Lebanon, an area which it used as a base from which to launch attacks on Israel. In fact, in Israel’s view the PLO had established real political control over the area.
After a raid into Israel in March 1978, the Israeli government responded by launching Operation Litani, sending 25,000 troops into Southern Lebanon. In the fighting up to 2,000 PLO fighters were killed, and many of the local population fled the area. The United Nations demanded Israel withdraw, and sent in a peacekeeping force.
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Relations Begin to Improve
So neither of these look like they were helping to create peace. But there were also some brighter spots during this period. Relations between Egypt and Israel began to improve, for example.
* In November 1977, the President of Egypt, Anwar Sadat, visited Israel, where he met the Prime Minister and addressed the Parliament (called the Knisset), where he gave his ideas for creating peace, which included the implementation of United Nations Resolution 242. Sadat was encouraged to do this by the United States, which by this point was seeking to bring Middle Eastern countries to the negotiating table rather than simply backing Israel.
* In September 1978 US President Jimmy Carter invited Israel and Egypt to peace talks, held at Camp David near Washington. Two agreements were created.