THURMONT, Md. - Just hours after the White House declared the nine-day Mideast summit a failure, Israeli Prime Minister Ehud Barak and Palestinian leader Yasser Arafat agreed to press on with their exhaustive effort to resolve the half-century-old conflict between their people.
The dramatic decision, which came around midnight Wednesday as delegation bags were packed and everyone was ready to go, surprised even President Clinton. ''Nobody wanted to give up,'' he said in announcing the talks will go on without him while he travels to Japan.
''We all thought it was over, at least for now,'' Clinton said, ''and we discovered that nobody wanted to quit, nobody wanted to give up, and that's encouraging.''
He cautioned, however, that ''gaps remain substantial'' between the two sides. ''There should be no illusion about the difficult task ahead.''
The president, who looked tired and spoke hoarsely, said the gaps between the two parties ''remain substantial but there has been progress.''
The biggest obstacle to a peace agreement was believed to be the future of Jerusalem.
Secretary of State Madeleine Albright was staying behind with Barak and Arafat as Clinton prepared to leave, a day late, for an international economic conference in Japan.
Even before Clinton spoke, Israeli and Palestinian officials said the two leaders were ready to continue the negotiations.
''The summit will continue with Secretary Albright after discussions that President Clinton had with both sides in order to try to reach an agreement,'' a senior Israeli official said.
''There are efforts now to resume the negotiations,'' said Hassan Abdel Rahman, the Palestine Liberation Organization's Washington envoy. ''President Arafat is not leaving the stage.''
In the talks shepherded by Clinton, Barak and Arafat could not come to terms.
''The summit has come to a conclusion without reaching an agreement,'' White House spokesman Joe Lockhart said when the negotiations broke up shortly before 11 p.m. EDT.
Despite the agreement to talk further, there was finger-pointing on both sides.
No details of the final hang-ups were immediately disclosed, but Jerusalem was believed to be the main problem. Clinton was understood to have pressed the two leaders to accept a U.S.-crafted compromise on Jerusalem's future and other core issues, including the disposition of Palestinian refugees.
''The Israelis are responsible for the failure of the summit,'' Rahman said. ''We came to the summit with an open spirit to reach an agreement, but the Israeli stance was not enough.
''Barak was negotiating with his own (Jewish) settlers, and not the Palestinians.''
But an Israeli official, Yuli Tamir, told Israel Army Radio, ''I'm very sorry that this summit simply did not come to anything. It's not because of us but because Arafat did not know how to go the extra mile.''
Earlier, in briefing reporters, Lockhart had indicated time was running out, saying no one saw any value in ''staying on forever.''
Clinton met with Arafat even as Lockhart briefed reporters on the situation. The president had met earlier with Barak. The two principals in the talks did not meet face to face during the day, Lockhart said.
Barak and Arafat were under pressure to find common ground on such contentious issues as the future of Jerusalem, the fate of 2 million to 4 million Palestinian refugees and their descendants, the size of a Palestinian state on the West Bank and in Gaza and the number of Jewish settlements to remain in the territories.
Israel radio and television reported Barak had written to Clinton complaining that the Palestinians had not gone to Camp David to negotiate in good faith.
''The Palestinians arrived at Camp David lacking a true commitment, and are not ready to have a substantive discussion about a lasting peace and to make historic decisions,'' Israel radio quoted a Hebrew translation of the letter. ''Unless there are last-minute changes, the Palestinians will have to envision the tragic consequences of an opportunity they missed.''
Rahman sought to rebut the prime minister. The PLO envoy said the Palestinians went to Camp David to achieve a just and lasting peace that the Israeli and Palestinian people could live with for generations.
''This peace does not deal with balance of forces but balance of interests,'' Rahman told The Associated Press.
He contended that in the talks Israel sought to impose settlement terms on the Palestinian people.
Lockhart said Clinton made telephone calls to four other leaders in the Middle East ''to give them some sense of where we are in this process.''
Lockhart said the president had received written communications from Arafat as well as Barak. He did not describe Arafat's letter, except that it was different in nature and substance from that Barak's letter complaining that the Palestinians were not negotiating in good faith.
Asked why they would send letters to Clinton when they were sitting in talks with him, Lockhart said that was a question for them, not him.
He said repeatedly that the sessions couldn't keep going as they have. ''There comes a time when you have to get on with the other business that's before you,'' he said.
On Jerusalem, Barak signaled before and during the summit that he was willing to give the Palestinians more control over Arab neighborhoods and to expand the area beyond the city. In exchange, Israel would absorb some Jewish settlement into the western part of the city.
But Rahman, the PLO official, said, ''There can be no agreement without total Palestinian sovereignty over east Jerusalem. This is a basic condition for achieving peace.''
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On the Net: State Department summit home page: http://www.state.gov/www/regions/nea/cdavid-summit.html