President Clinton is making a last-ditch effort to broker a Middle East peace agreement at the Camp David summit between the Israeli and Palestinian leaders with a series of all-night negotiations.
Mr Clinton plunged into an intensive round of meetings with both sides which lasted until dawn following his return from the economic summit in Okinawa, Japan, but the status of Jerusalem appears to be a major obstacle.
The White House spokesman, Mr Joe Lockhart, said the Mr Clinton "will remain here as long as he believes we have some prospect of success".
The President had separate meetings with the Israeli Prime Minister, Mr Ehud Barak, and the Palestinian leader, Mr Yasser Arafat. While there is no formal deadline for ending the talks, a US spokesman, Mr Richard Boucher, told reporters that "we are not here for an unlimited period of time".
"It continues to be very hard and we continue to try to move forward. We might reach a deal. We might not," he said.
An Israeli negotiator, Mr Shlomo Ben-Ami, told Israeli army radio yesterday that "the outcome . . . will become finally or almost finally clear during the next two days."
There have been reports that the US side may propose that the summit confirms agreement on Israeli withdrawal from 90 per cent of the occupied West Bank and arrangements for the limited return of Palestinian refugees but that a final decision on the status of Jerusalem be postponed for a later meeting.
If the summit fails, the Palestinians have indicated they will declare an independent state on September 13th.
Both the Israeli and Palestinian sides have been accusing each other of intransigence. The summit almost broke down last week as President Clinton got ready to leave for the G7 economic summit in Japan, but Mr Barak and Mr Arafat agreed to a last-minute appeal from the Mr Clinton to remain at Camp David until his return.
Mr Arafat is reported to have been in touch with other Arab leaders, including President Hosni Mubarak of Egyupt, over the problem of Jerusalem. The Cairo daily newspaper, al-Gomhuria, reported yesterday that Mr Arafat, in a telegram to Mr Mubarak congratulating him on the 48th anniversary of Egypt's 1952 revolution, asked him "to support our negotiating position" and accusing Israel of "stubbornness" in the negotiations.
The US compromise plan is said to propose various degrees of sovereignty for the Palestinians over parts of Jerusalem which the Israelis insist must remain their undivided capital. In the 1967 war, Israel seized East Jerusalem, which includes the religious sites of the Jewish, Muslim and Christian faiths, from Jordan. The Palestinians insist that they be given sovereignty over East Jerusalem.
According to the New York Times, the US is proposing "virtually full sovereignty" for the Palestinians over their villages in East Jerusalem and a "sense of sovereignty" over the Muslim religious sites in the Old City such as the Al Aksa Mosque and the Dome of the Rock. There would be another category of "shared sovereignty" over other parts of East Jerusalem adjacent to the holy sites.