President in all-night session to rescue talks

Despite negotiations that lasted until dawn the emotional subject of Jerusalem may still prevent a deal between Israelis and Palestinians

In an all-night session at Camp David, President Bill Clinton tried to put some momentum back into Middle East peace talks yesterday. But as the discussions approached their third week, it remained uncertain whether any agreement was possible.

In an all-night session at Camp David, President Bill Clinton tried to put some momentum back into Middle East peace talks yesterday. But as the discussions approached their third week, it remained uncertain whether any agreement was possible.

Mr Clinton returned to the talks at the Presidential retreat in Maryland after an abbreviated trip to Japan for a summit of the Group of Eight industrialised nations. He worked until dawn yesterday, meeting negotiators. But the complex and emotional subject of Jerusalem continued to prove the toughest obstacle to a deal.

White House spokesmen would only say the talks were "intense and substantive," but the US continued to maintain a news blackout.

That did not stop both sides - especially the Israelis - from constantly leaking what they said were details of proposals under discussion.

Much of this is for domestic consumption; some seems aimed at undercutting the Palestinians. The President must decide soon whether there is enough progress to justify continuing. So far, the President has believed that momentum can be sustained, though the talks came within an inch of breaking up completely last week.

"I think the fact that he was up until 5am working through the issues should lead you to believe he thinks staying here for the time being is worthwhile," the White House spokesman said.

But, he added: "All the parties know there's a balance between taking the time to work through the issues and taking too much time that will never lead to an agreement."

The Israeli negotiator, Shlomo Ben-Ami, said yesterday: "The outcome ... will become finally or almost finally clear during the next two days."

Mr Clinton met his own negotiating team yesterday; officials said all three sides would now head into round-the-clock talks, which could be the precursor to an agreement, or it could preface a total breakdown.

If the talks are suspended, it will not be a matter of picking up at the same place later. Deals tend to fall apart, get re-interpreted or lapse once the parties withdraw from the table.

The Israeli leaks indicate that a favoured deal would give Israel complete sovereignty over Jerusalem, with some autonomy for Palestinians in areas of east Jerusalem. This will clearly not fly. One key issue is the status of places that are sacred to Muslims, Jews and Christians.

"The solution is very simple - give full sovereignty of east Jerusalem to a Palestinian state," said a Palestinian official Tayib Abdel Rahim. "We are ready to have Jerusalem as an open city for all religions."

Saudi and Egyptian officials have conferred, and Egyptian President Hosni Mubarak flew to Saudi Arabia on Sunday. Mr Mubarak is also expected to discuss the issues with Syrian President Bashar Assad and Jordan's King Abdullah II.

Saudi Arabia's monarchs are deemed the guardians of the holy places, Mecca and Medina. They will have an important role to play in the disposition of holy places in Jerusalem.

But it is far from clear that the many other complex issues have been finalised. Usually in such agreements, nothing is agreed until everything is agreed.

Mr Abdel-Rahim said: "There has been no agreement reached on any of the negotiable issues on the table including Jerusalem, borders, economy, refugees, security, (Jewish) settlements and water. No files have been closed."

Mr Clinton is likely to continue for another day or so and then, perhaps, declare victory and get the hell out, as the old phrase from Vietnam had it.

"At this stage, they're still working for a final deal," said one source. If that did not work, a summit could be reconvened in August.