The Peace Breakdown

The White House plays a risky game at Camp David--and loses. Yet peace hopes stay alive

The 15 days at Camp David took on an odd life of their own. Dozens of golf carts zipped from cabin to cabin at the northern Maryland presidential retreat, with Israeli and Palestinian officials scrunched in them haggling with one another and dodging chipmunks darting across their paths. There were negotiations across tables, but just as much work got done over pinball machines at Hickory Lodge. With talks held practically round the clock, diplomats began to mark time by hours instead of days. And with clouds dumping rain almost every day, the Middle East guests--accustomed to dryer climates--complained that they were stuck in an expensive but soggy refugee camp.

Even the summit's death seemed odd. It came at 2:30 a.m. on Tuesday. Saeb Erakat, a top aide to Yasser Arafat, walked into the living room of Aspen Lodge, where Bill Clinton, Secretary of State Madeleine Albright and National Security Adviser Sandy Berger sat, and read them a letter from the Palestinian leader. Arafat saw no use continuing talks on an agreement to end 52 years of conflict with Israel. Sovereignty over Jerusalem and its holy sites was the stumbling block. "The problem is they both want the same thing," Albright said later in an interview with TIME: control of the city's eastern half.

Erakat folded the letter and looked up dejectedly: "I'm very unhappy that we did not reach an agreement." Clinton stared at him vacantly. "I don't like to fail, particularly at this," he said softly. But he and the others were too spent to even feel sad. Clinton had been up almost 48 hours in a final diplomatic surge; Albright and Berger had had so many emotional highs and lows in the previous two weeks that they were numb. In nearby Laurel Lodge, where meals were served, Palestinian and Israeli diplomats had already begun hugging one another and apologizing. Relations between Arafat and Barak remained frosty, but their negotiators have grown close over the years. Which wasn't unusual, considering that back home their people had learned to live close to one another. They just hadn't learned how to live in peace.

Would they ever? Arafat returned to a hero's welcome in the Gaza Strip, where thousands cheered him for not giving up Jerusalem. Barak stepped off his plane at Tel Aviv with what he admitted was a "sour heart" and with the worry of a crumbling government coalition.

Evaporated as well perhaps were Clinton's dreams: a final foreign policy triumph, the chance, maybe, to preside over a showy ceremony establishing a Palestinian state, maybe even breaking ground for a U.S. embassy in West Jerusalem, a prospect Clinton raised again at week's end in an effort to boost Barak's support at home. But this time, "they couldn't get there," Clinton acknowledged after the talks. He placed most of the blame on Arafat. A more flexible Barak had come to the summit showing "courage, vision and an understanding of the historical importance of this moment," the President said. Arafat arrived cemented in old demands.

That should have been no surprise. The Palestinian leader had made clear he didn't want to be at Camp David just now, still believing he'd already compromised enough and wary of dickering anymore over principles he held sacred. "I'm not a negotiator, I'm a decision maker," Arafat told an aide before boarding his jet for the U.S. While Barak showed up with a headful of new ideas on how to resolve thorny issues like boundaries for a new Palestinian state and the number of Palestinian refugees allowed to return to their homes, Arafat spent the first four days delivering monologues. When he wouldn't look at a map Barak had drawn with new boundaries, Clinton finally blew up. "This is ridiculous!" the President shouted. "This is not the way to negotiate. If you insist on stonewalling, this is going to go nowhere!"

Stunned, Arafat began bending, but not much. He still balked at joining Barak in considering American proposals for how control of Jerusalem might be divided. Clinton phoned Egypt, Jordan and Saudi Arabia--recipients of billions in U.S. aid--but their leaders not only refused to pressure the Palestinian, they also urged him to stand firm. Barak and Arafat began playing "luggage diplomacy," ordering aides to put bags outside doors to threaten walkouts. By Wednesday night, July 19, even Clinton was ready to close down the talks, but at the last minute Barak and Arafat decided to remain at Camp David with Albright, while Clinton flew to Okinawa for the G-8 economic summit.

When Clinton returned to Camp David on Sunday evening, July 23, he decided to plunge into assembly-line diplomacy, meeting with small teams of Palestinian and Israeli negotiators to tackle each issue. Scribbling on yellow pads, Clinton began losing even Berger and Albright in the details, but gradually he made progress. By 5 a.m. Monday, with CIA Director George Tenet at his side, he had the two sides tentatively agreeing on new Israeli security measures once land was transferred. Next he brought in the negotiating teams for refugees, then for borders.

By Monday night, however, it was clear that Barak and Arafat wouldn't move further until they knew what they would have to give up on Jerusalem. Clinton presented a compromise, which Barak approved if Arafat accepted: Israel would have sovereignty over West Jerusalem and much of East Jerusalem, but the Palestinians would run municipal services in East Jerusalem and have formal sovereignty over some of its neighborhoods. The Palestinians would also control Muslim holy sites.

Arafat angrily turned down the U.S. plan, demanding full sovereignty over all of East Jerusalem. At 1:30 a.m. Tuesday, Clinton sent Tenet to Arafat's cabin to see if he could soften him up (the two bonded at previous summits). Tenet came back half an hour later. "It's ugly down there," he told Clinton. Arafat wouldn't budge.

No one knew whether it would get uglier. Arafat has threatened to declare unilaterally a Palestinian state if no accord is reached by Sept. 13, but so far Israeli and Palestinian streets have been calm. Though the summit collapsed, it did force the two sides to negotiate on once taboo subjects, such as who owns the holy city. Says Palestinian spokeswoman Hanan Mikhail-Ashrawi: "Files are now open that were hitherto closed." But it will take more courage still for peace. --With reporting by Lisa Beyer and Matt Rees/Jerusalem and Jay Branegan/Washington

HIGH-STAKES POKER

HOW IT ALL COLLAPSED

Here's the way Clinton tried every trick in the book--including one his aides call "the full Lyndon"--but still came up empty-handed

DAY 1
Smiles to Start

Arafat and Barak were playful the day they arrived at Camp David on July 11. But the jokes ended at the door. Arafat complained to aides that he didn't want to be there, worried that a failure could leave him looking like the bad guy.

DAY 2
A Wonkfest

Barak came to the summit with an encyclopedic knowledge of the negotiating details and a willingness to brainstorm new ideas with Clinton. The two engaged with enthusiasm, sunny weather reflecting their hopes.

DAY 8
The Treatment

Arafat, who likes windy speeches, is still giving the Israeli proposals short shrift. Clinton alternates between bursts of anger and what aides call "the full Lyndon Johnson" treatment, cajoling the Palestinian leader to bend.

DAY 12
Escape Valve

With Clinton gone to the G-8 and Albright left to preside over the talks, the pressure-cooker atmosphere eases. The two sides mellow in informal sessions. Over the weekend, Albright takes Arafat to her Hillsboro, Va., farm.

DAY 14
No. Finally, No

Clinton offers a bridging proposal on Jerusalem, the trickiest issue. Barak seems to agree to it. But Arafat--despite hours of talking--stonewalls the President. At 2:30 a.m., an Arafat aide delivers the bad news to a somber Clinton.