The Israeli Prime Minister, Mr Ehud Barak, and the Palestinian President, Mr Yasser Arafat, have returned to the Middle East, both claiming that they have refused to bow to unreasonable demands and expecting plaudits from their separate constituencies. But Mr Barak is now without a peace deal or a parliamentary majority, and Mr Arafat is without a capital for the state he wants to proclaim. And having failed to make concessions in order to make peace, both are in danger of becoming captive to more extreme elements in Israeli and Palestinian society.
Mr Barak has gambled with his political future, angering the Israeli right by going further than any of his predecessors in offering to compromise, while disappointing the centre and the left by failing to secure a deal that would guarantee Israel's future security and peace. Now he may have to consider the unthinkable and form a unity government with the right, a prospect that offers even less hope for peace.
Mr Barak's only hope of surviving a vote in the Knesset next Monday now lies in compromise with the very coalition partners who deserted him in recent weeks. If he loses, early elections may offer him a better chance of forming a government dedicated to seeking peace; if he survives, the Knesset goes into recess until October, giving him the space to consider new approaches to peacemaking. But time is not on his side: he will still face pressure to reach a deal before September 13th, the date by which Mr Arafat is determined to declare a Palestinian state, with or without an accord.
The Israelis blame Mr Arafat's refusal to budge on Jerusalem for the collapse of the Camp David talks. But Mr Arafat, for his part, is claiming success by taking a tough stance and refusing to allow the Israelis to stake a permanent claim to key portions of East Jerusalem. However, Mr Arafat has failed to satisfy Hamas and other extreme forces, and as more Palestinians come to realise that the proclamation of a state may not bring real and sustainable peace closer, he may find it increasingly difficult to control frustration that spills over into violence on the streets.
The stumbling block for Mr Arafat and Mr Barak was the holiest site in Jerusalem, the al-Aqsa Mosque, the third most sacred site in Islam, which stands atop the Temple Mount, the holiest site in Judaism. It is hard to see how Jews or Muslims could give ground to each other on such ground. For hundreds if not thousands of years, there has been a failure to agree on who Jerusalem belongs to and who should be entitled to share it. And yet the very fact that Israeli and Palestinian leaders could sit down at the same table and agree to discuss the fate of Jerusalem has been a breakthrough in itself. Mr Barak has reshaped political debate in Israel forever.
The prospects of re-launching the talks or organising a new summit before September 15th are slim. In the coming days and weeks both sides will need creativity and sensitivity to pursue the alternatives, to reduce friction and to prevent violence.