The last post about this purse described the gusset and handles. Here is a picture of how that turns out. The other end looks just the same.
Just before the handle starts, the edge has a corner (near where the yarn is wandering away). There are 4 of these corners.
The next step is to fold the whole thing in half so the handles are next to each other, and stitch the side seams from those corners down to the bottom edge.
The handles right now are flat. Slip stitch the long edges together to make a tube for each handle, and it felts nicely into a rounded handle.
I'll have pictures of the finished item in the next post, with any luck.