Rabin and Arafat (and Peres) tried, with the Oslo accords, to move toward a settlement of a long-standing, violent dispute. They didn't completely succeed. And indeed, you could argue (as many do) that the Oslo accords were a mistake. But they were willing to take risks in order to perhaps make things more peaceful for their people, and that's the sort of thing that the Nobel Committee wanted to reward.
Of course, now that I've described things in this way, maybe Snowden is an appropriate recipient...
