The Camp David Middle East peace summit reached a "pivotal moment" early today with President Clinton working furiously to forge a pact between Israel and the Palestinians ahead of a deadline, set for this morning, the White House said.
"We've reached a pivotal moment here in these talks and everyone is working very hard to see if there is some way we can get from where we are now to an agreement," said White House spokesman Mr Joe Lockhart.
Israel and the Palestinians have agreed that Jerusalem is the main stumbling block. Palestinian officials say Israel has refused to cede more than municipal autonomy over a few Arab neighbourhoods of the city.
Palestinian sources said that in a last-ditch effort to salvage a deal, the US had offered a proposal under which Israel and the Palestinians would share sovereignty in part of the Old City and the Palestinians would have sovereignty in some areas outside the 1967 city limits. Israel would keep sovereignty over the rest of the city.
A Palestinian official in touch with the negotiators said the Palestinian delegation had been given until early this morning to make up its mind.
Mr Lockhart said Mr Clinton would decide overnight whether the summit was worth continuing and was likely to issue a statement before he leaves today on an already delayed trip to Japan.
"There comes a time when you have to put some time limit on your discussions; you can't continue to discuss things in a completely open-ended way," Mr Lockhart said.
He denied reports that the Israeli Prime Minister, Mr Ehud Barak, had threatened to walk out of the talks, complaining that the Palestinian leader, Mr Yasser Arafat, was not serious about wanting peace.
"Those reports are erroneous," he denied, while admitting that both Mr Barak and Mr Arafat had sent Mr Clinton written messages in the last 24 hours despite frequent meetings.