The Talmud Yerushalmi (Eruvin 3:9) notes that our two-day celebration of Rosh Hashanah is an enactment of the early Prophets, who established it for the following reason. During the period of the Prophets, the sanctification of the months was dependent upon hearing the testimony of witnesses who had seen the new moon. On the evening following the twenty-ninth day of Elul, the court would sanctify the day as the first of Tishrei based on the possibility that witnesses might come that day and testify that they had seen the new moon, retroactively establishing Rosh Hashanah on that day. If the witnesses did indeed appear, then that day would be sanctified and the following day would be a regular day - the second of Tishrei. However, if witnesses did not appear, then the following day would be Rosh Hashanah and retroactively, the previous evening - which the court had sanctified - would turn out to be a regular weekday. So that people would not treat the first day lightly, since its sanctified or weekday status was dependent upon the appearance of witnesses during the course of the day, the early Prophets ordained that Rosh Hashanah be celebrated as a twoday holiday - with the prohibition of work, the sounding of the shofar, and the order of prayer being observed on both days.
However was the Two Day Rosh Hashana really so accepted in Israel?
We find this testimony in a letter from Rav Nissim Gaon to Rav Hai Gaon:
ואמר אדוננו כי בני ארץ ישראל תופסין ראש השנה שני ימים ואנו רואין עד עתה אין תופסין אלא יום אחד.Our master said that the people of Eretz Yisrael Keep two days, however we see until today that they keep only one.
Rav Hai Gaon answered that their the residents of Israel were in error and were not following their ancestor's custom.
Another testimony of the custom of keeping only one day of Rosh Hashana in Israel is found in the comments on the Rif of Ba'al Hamaor on Tractate Beytza (פ"א) from the 12th century:
"בדורות הללו מאחר שהותקן סדר העיבור ע"פ המנהג שנהוג בידינו הרי חזרה כל א"י להיות כבית הוועד שאין להם ספק בקדושת היום ואינן חייבין לשמור כי אם יום אחד בין בר"ה בין בשאר ימים טובים, וכן נהגו לעשות בא"י כל הדורות שהיו לפנינו, עד עתה חדשים מקרוב באו לשם מחכמי פרובינציאה והנהיגום לעשות שני ימים טובים בר"ה על פי הלכות הרי"ף".In past generations since the leap year was determined by the minhag we have (i.e a calculation) all of Israel returned to be like Beit Havad that has no doubt about the sanctity of the day and don't have to keep but one day, both on Rosh Hashana and other festivals, and so they acted in the land of Israel all the generations before us, until recently there arrived there rabbis from provence and instituted that they should keep two days on Rosh Hashana as it is written in the Rif.
Ba'al Hamor explains that in Israel once the Calendar was no longer set by witnesses - and hence there was no longer any fear that necessitated two days - the people reverted to keeping only one day of Rosh Hashana. However when the students of the RIF arrived in Israel - they managed to root out this custom, and enforced a two day observance.