NEW YORK - Israel's Ehud Barak and Palestinian leader Yasser Arafat resisted pleas from President Clinton to accept a U.S. proposal on dividing the sacred city of Jerusalem between them, officials said yesterday, dealing another severe blow to hopes that a Middle East peace accord will be reached this year.
Although Barak promised to consider the U.S. proposal, which was made by Clinton Wednesday and which reportedly involved giving the Palestinians sovereignty over two Islamic holy sites in Jerusalem's Temple Mount, the Israeli prime minister said that some of the proposal's elements "are beyond what we can accept."
Arafat, in his own meeting with Clinton, did not embrace the ideas, either, according to U.S. officials.
"I can't betray my people," Arafat said in an interview with CNN. "I can't betray the Arabs. I will continue to liberate all the Islamic and Muslim holy places."
U.S. officials refused to give up on the Middle East challenge, which Clinton badly wants to resolve before he leaves office. The president has instructed chief Middle East negotiator Dennis Ross to continue talking with the Israelis and the Palestinians.
"We're going to continue discussions," Secretary of State Madeleine K. Albright told reporters last night. "Our sense is that both parties have a desire to go on, that they want to reach a conclusion."
Even so, Arafat's and Barak's resistance to a compromise that the Americans have had more than a month to formulate and sell does not bode well for the peace process, which included two weeks of intensive talks at Camp David in July.
As of last night, no three-way meetings among Clinton, Barak and Arafat were planned in New York, where they are attending the United Nations Millennium Summit of world leaders.
Arafat was expected to leave today for Gaza, where a Palestine Liberation Organization meeting will discuss whether to unilaterally declare a Palestinian state next week.
Clinton's term in office is running short and it's unclear if he would have the prestige and congressional backing to broker a peace accord after U.S. elections in early November.
Barak's hold on power is slipping, too, because he has lost his governing majority and almost certainly will face an election call when Israel's parliament returns next month.
"Time is somehow running out, and I don't believe that either President Clinton or the Israeli government will be able to negotiate under the same terms two months from now," Barak said at a news conference in New York yesterday.
"If Chairman Arafat is ready to take Clinton's idea as a basis for negotiations, we will be ready to contemplate it and to enter into such a negotiation. Until now we have not seen Arafat ready to take Clinton's ideas as a basis for negotiation. This we interpret as lack of flexibility."
Clinton and the two Middle Eastern leaders are among more than 150 world dignitaries in New York for the Millennium Summit, billed as the biggest ever convention of heads of state.
This is the first time the three leaders have been in one place since the Camp David meeting, and Washington had hoped that recent U.S. requests to the Arab world to support Arafat on a Jerusalem compromise would pay off with a breakthrough this week.
According to several reports, the U.S. proposal would give Israel sovereignty over the Western Wall, the only remains of the ancient Jewish temple that was destroyed by Romans. The Palestinians would get sovereignty over the Al Aqsa mosque and Dome of the Rock shrine and also would gain sovereignty over some neighborhoods and outlying suburbs of Jerusalem.
Both sides envision their national capitals in Jerusalem, which contains some of the holiest sites in Islam, Judaism and Christianity.
Albright tried to paint Clinton's meetings with Arafat and Barak as progress, saying the level of detail in the discussions on Jerusalem represented a step forward. But the three sides already have had ample opportunity to talk about the Holy City in excruciating detail during the two weeks at Camp David and in lower-level talks since then.
A key Clinton administration tactic has been the wooing of Arab leaders, who are an important, if informal, part of Arafat's constituency. U.S. Assistant Secretary of State Edward Walker went on a whirlwind tour of Arab capitals last month and Clinton met last week in Cairo with Egypt's Hosni Mubarak.
The idea was to gain Arab support for a compromise on Jerusalem, which is proving to be the most difficult issue in the Israeli-Palestinian talks. But the U.S. campaign has had little apparent effect.
In New York this week, senior diplomats from Saudi Arabia, Syria and the United Arab Emirates have all repeated the Arabic demand that Israel withdraw from all territory that it occupied in the 1967 Middle East War, including East Jerusalem, the Temple Mount and all of the West Bank.
Barak said yesterday that in his meeting with Clinton he had "made it very clear that no Israeli prime minister will ever be able to sign a document that gives up the sovereignty over places like the Temple Mount to the Palestinians."
Barak also appeared to hold out little hope of a partial Isaeli-Palestinian agreement, one that would establish the borders of a Palestinian state and settle the question of Palestinian refugees but leave open the question of Jerusalem.
"At Camp David the Americans raised the idea that either the whole issue of Jerusalem will be delayed by one or two years, or maybe parts of Jerusalem, maybe the Old City or the Temple Mount will be delayed for 15 years," he said.
"After quite painful hesitation, we were ready to say that we were ready to contemplate it if the other side is ready to negotiate it. It happened the idea was refused by the Palestinians."
U.S. officials were vague yesterday on what the next step in the peace process might be.
"The president is obviously prepared to be engaged at any time," Albright said. "He's still here and will be here tomorrow. It's a floating operation, and we are working hard and meeting with whomever we can to pursue the subject."
At least one deadline staring the peace negotiators in the face has appeared to be relaxed. Arafat repeatedly had vowed to declare Palestinian independence Wednesday, the seventh anniversary of the interim Oslo accord between Israel and the Palestinians.
But in recent days the Palestinians have signaled that they will let the anniversary go by without provoking Israel with a unilateral declaration.