The government of Prime Minister Ehud Barak wants to complete a peace treaty with the Palestinians by the end of President Clinton's term. Clinton has been working on the issue for nearly seven years and has invested heavily in the success of the effort. Barak sees himself fighting against time. Clinton's term is coming to a close and a successor will take time to focus on the Middle East. The Palestinians have threatened to unilaterally declare a state as early as Sept. 13. Palestinian leader Yasser Arafat is more than 70 and his health is not good.

Barak is willing to address each of the Palestinian goals. But he is not willing to fulfill them. The prime minister, whose coalition is crumbling because of the government's negotiations, is willing to cede the entire Gaza Strip and at least 95 percent of the West Bank, including the Jordan valley. A key condition is that Israeli and international peacekeepers ensure that the area is demilitarized. Barak is ready to give the Palestinians control of many Arab neighborhoods in Jerusalem and a formal presence on the Temple Mount.

The prime minister is also ready to accept as many as 100,000 Palestinian refugees over the next 10 years. But Barak insists on formal Israeli control over Jerusalem, authority over how many and which Palestinians can enter Israel and the retention of some Jewish settlements.

Barak also wants money. Israel has been proposing billions of dollars in compensation for the withdrawal from the West Bank and Gaza Strip.

Yasser Arafat's controversial accord with Israel in 1993 saved his leadership and provided the Palestinians with their first territorial authority. It also introduced the more than two million Palestinians in the West Bank and Gaza Strip to Arafat's heavy-handed rule. Arafat wants a settlement with Israel that increases his support and does not classify him as a traitor. His red lines have been clear: Arafat wants a Palestinian state in all of the West Bank, Gaza Strip and eastern Jerusalem with a sovereign corridor that runs through Israel and connects the two enclaves.

Arafat wants the uprooting of all Jewish settlements -- whether now or in a few years -- and the right of every Palestinian refugee to return to his home in what is now Israel. Privately, Arafat is willing to assure Israel that the Jewish state will not be flooded by refugees. But he wants the principle of return to be a key requirement of an agreement.

The Palestinian leader wants international peacekeepers to replace every Barak demand for Israeli troops in the West Bank or Gaza Strip. Arafat has warned that his goals are the minimum the Palestinians can accept. His key card is a threat to unilaterally declare a Palestinian state by the end of the year.

Arafat also wants billions of dollars. The latest demand is for $40 billion for refugee resettlement and development.

The United States has one goal: to maintain peace in the Middle East. Formally, the U.S. position is nearly identical to that of the Palestinians. Successive administrations have supported full Israeli withdrawal from the territories captured in the 1967 war, the illegality of Jewish settlements, the right of refugees to return or obtain compensation. But the Clinton administration, sensing the flexibility of Prime Minister Barak, is urging the Palestinians to give on at least two issues: Jerusalem and the right of return.

On Jerusalem, the United States supports a formula that comes close to that offered by Barak. On the refugees, the United States prefers a symbolic number of Palestinian refugees to return to their homes in what is now Israel. The administration is urging Palestinian control over the Temple Mount and an exchange of territory to ensure that any Palestinian state includes the area of the entire West Bank and Gaza Strip.

The United States is prepared to invest billions to finance a settlement. But Washington does not want to be the sole benefactor and wants the European Union, Japan, the Gulf states to at least match the U.S. pledge.

More than any other Arab state, Jordan will be made or broken by the Israeli-Palestinian agreement. Jordan wants an agreement that will encourage hundreds of thousands of Palestinians to leave the Hashemite kingdom and return to the West Bank. Amman also wants billions of dollars in compensation for the millions of refugees it has supported since 1949 for development of the kingdom.

A key concern of Jordan is whether the Palestinians are given the right to a state that will border the Hashemite kingdom. King Abdullah has sent signals to Israel urging Prime Minister Barak to prevent such a scenario.

Egypt's main goal is that it retains its influence over Arafat and its position as leader of the Arab world. Cairo will seek to gain increased U.S. economic and political support in any Israeli-Palestinian accord, arguing that Egypt played a major role in the last seven years of negotiations. Egypt will also seek access to new advanced weapons and benefits identical to that enjoyed by Israel.

Inside Camp David - Headlines
The Players
The Issues