According to press reports, the Israelis and Palestinians made progress during the July Camp David peace talks, yet they failed to produce a final pact. What did they agree and disagree about?
Land: Israel was prepared to surrender all of the Gaza Strip and about 90 percent of the West Bank to the Palestinians but insisted on keeping several different West Bank zones where 140,000 Jewish settlers live. Israel also considered giving up an uninhabited desert parcel that borders Israel, Egypt, and Gaza. Under the deal, the 40,000 Jewish settlers living in retroceded portions of Gaza and the West Bank could either live under the Palestinians or move to Israel. (Most would likely choose the latter.)
Refugees: Media reports are vague about progress on the Palestinian refugee issue. Israel offered to accept 100,000 Palestinian refugees as part of a family reunification program. It also offered to help establish an international relief fund to resettle the remaining 2.9 million Palestinian refugees.
Jerusalem: The talks ultimately broke down over the Old City of Jerusalem, which includes both Arab and Jewish holy sites: the Temple Mount complex (the Al Aqsa Mosque and the Dome of the Rock) and the Western Wall (the only remnant of the Second Jewish Temple). Israel proposed some sort of international governance for the Old City, but the Palestinians insisted on sovereignty. As part of the West Bank land deal, Israel offered to give the Palestinians full sovereignty over parts of East Jerusalem. The sides also disagree about where a Palestinian capital would be located. The Israelis would accept a capital in Abu Dis, a West Bank city bordering Jerusalem, but the Palestinians insist on Jerusalem itself.