Jerusalem remains the biggest obstacle to peace

Yet again, as so often before in the Middle East peace process, the glass is both half-empty and half-full. The confusion yesterday afternoon was symptomatic. First came the urgent announcement (sourced to a Palestinian official) of a meeting in New York next week between the Palestinian leader, Yasser Arafat, and the Israeli prime minister, Ehud Barak. That was followed soon after by equally urgent denials from the Israelis. Maybe they will, maybe they won't. The truth is that nobody, including the participants, quite knows.

Yet again, as so often before in the Middle East peace process, the glass is both half-empty and half-full. The confusion yesterday afternoon was symptomatic. First came the urgent announcement (sourced to a Palestinian official) of a meeting in New York next week between the Palestinian leader, Yasser Arafat, and the Israeli prime minister, Ehud Barak. That was followed soon after by equally urgent denials from the Israelis. Maybe they will, maybe they won't. The truth is that nobody, including the participants, quite knows.

President Clinton, meanwhile, is eager to remain centre-stage. In the dying days of his presidency, Mr Clinton is clearly anxious to be remembered for something other than That Dress. His involvement in the peace process can thus be seen as a last bid to be respectfully remembered in the history books; Mr Clinton's motives will, however, come to seem less important than the result. After his meeting yesterday with the Egyptian president, Hosni Mubarak, it was clear that there had been little progress, despite the best intentions of both sides. But the process is not quite dead.

The Palestinians have said that if no progress is made during the next fortnight, they will declare an independent state on 13 September. That may just be bluster. Equally, however, the chances of reaching an agreement by that date look frail.

The talks at Camp David broke down last month without any agreement. The key issue, by which everything else stands or falls, is the future status of Jerusalem, holy to Christians, Muslims and Jews alike. The Palestinians insist that East Jerusalem, captured by Israel in 1967, should be the capital of a future independent state; Israel regards Jerusalem as its indivisible, eternal capital. Something must give. Reconciliation is essential, particularly at Haram al-Sharif, known to the Israelis as Temple Mount, and considered a holy site within both Judaism and Islam.

Common sense suggests that both sides will need to compromise for a solution to be found. However, even if Mr Barak and Mr Arafat are ready to reach a deal, many of those whose support they most need do not seem ready to make concessions to the other side. The hope is that the Arab nations will give Mr Arafat the cover he needs to compromise on the status of Jerusalem, and that the Israeli public will prove more flexible, in a referendum, than their elected politicians in the Knesset.History has given Jerusalem to more than one people; some formula must be found that recognises that reality.