The agreement was initialled at the White House last night by the Israeli Prime Minister, Benjamin Netanyahu, and the Palestinian leader, Yasser Arafat, with President Bill Clinton and King Hussein of Jordan. But eight days of tense negotiations have left little trust, and Mr Clinton came under heavy attack at home for the circumstances of the deal.
Madeleine Albright, the US Secretary of State, praised the President for writing "a new chapter in the pursuit of permanent peace". The President warned that "the enemies of peace will seek to extract a price from both sides". But, she said, "the work at Wye River shows what happens when the will for peace is strong".
King Hussein, who made an emotional appeal for peace to the Israelis and Palestinians on Thursday night, is undergoing cancer treatment in the US and looked gaunt and frail.
At the last moment the deal nearly foundered as the Israelis demanded the immediate release of Jonathan Pollard, who spied for Israel in the Eighties and is serving a life sentence in America. The US refused but Israel insisted on the issue, dragging out the talks for an extra eight hours.
"I have agreed to review this matter seriously at the Prime Minister's request," Mr Clinton said tersely. "I have made no commitment to the outcome of this review." He looked tired and drawn following 24 hours of negotiation.
The Israelis insisted that America had pledged Mr Pollard's release during the week's negotiations, and that without this there would have been no deal. Israel had agreed to release hundreds of Palestinian prisoners, and accepted that Palestine would not extradite all those whom Israel accuses of terrorism. "The return of our prisoners was an integral component of the overall agreement," said Ariel Sharon, Israel's Foreign minister yesterday.
The Americans furiously denied this. "Any suggestion by any quarter that the President made a commitment to release Jonathan Pollard is inaccurate and false," said Jamie Rubin, the State Department spokesman.
The release of Pollard would spark fury in the US, especially on the political right and in the military and intelligence establishments.
Pollard leaked secrets to Israel that covered not just US-Israeli relations but details of sensitive data concerning the then Soviet Union, which Israel traded to Moscow in return for the release of Russian Jews. Any decision to release him will be depicted as an attempt to boost Mr Clinton's prestige ahead of congressional elections at the expense of national security.
Mr Clinton in 1994 and 1996 rejected a presidential pardon for Pollard, and his predecessor George Bush, just before leaving office in January 1993, also refused to grant Pollard clemency. In Houston, Mr Bush was asked whether he would have problems if Pollard was released as part of a Middle East peace deal.
"I would ... just on the face of it. They've been trying to do that for a long, long time, but this is the first time I've heard of this - not trying to get Pollard out, but part of some trade," Mr Bush said. Many Israelis consider Pollard a national hero, while US officials have branded him a traitor.
The deal was agreed in an all-night session from Thursday night to Friday morning after more than a week at a conference centre in rural Maryland. It covers Israeli withdrawal from more of the West Bank and a Central Intelligence Agency-authored strategy for Palestinians to clamp down on radical groups. The Palestinians agreed to extradite 30 suspects whom the Israelis want to put on trial, and Israel agreed to release hundreds of Palestinian prisoners.
The Palestinians also agreed to amend their charter to remove sections which Israel says threaten its existence, and Mr Clinton will fly to Gaza in a few months time to mark the occasion. A further Israeli withdrawal will also be negotiated. This would clear the way for new negotiations on an agreement that covers the permanent status of Palestine, a landmark deal that would finalise issues as sensitive as statehood, Jerusalem, and the return of millions of Palestinian refugees.
The former Israeli prime minister Shimon Peres called the new interim peace deal a "victory" for the Oslo accord which kicked off the peace process five years ago.
The United Nations Secretary-General, Kofi Annan, who is visiting South Korea, welcomed the agreement and congratulated Mr Arafat and Mr Netanyahu "for having had the courage to make the compromises necessary for peace."
Israeli right split, page 14
Relations damaged, page 15
what the agreement will mean
WEST BANK: Israel to withdraw from another 13 per cent of the West Bank, surrendering this to Palestinian control, and withdraw from 14 per cent of the area under shared control. This will leave 40 per cent of the West Bank and 60 per cent of the Gaza strip under Palestinian control. A joint committee will address a further withdrawal within four months.
SECURITY: The Palestinian Authority will put in place a detailed programme to dismantle armed groups, arrest and prosecute militants. Israel will submit a list of names of those it believes should be arrested which will be vetted by the CIA. A joint Israeli-Palestinian Commission will monitor and counter incitements to violence. Israel will free, in batches, 750 of the 3,500 Palestinian prisoners it holds. Palestinians agree to arrest 30 people from a list of 36 submitted by Israelis.
CHARTER: Within two months after withdrawals start, the Palestinian Central Council will meet to cancel anti-Israeli clauses in the 1964 PLO Covenant. A month later, a larger group will meet in Gaza to approve the decision. President Clinton will attend.
TRANSPORT: Israel will build two transportation corridors between the Gaza strip and the West Bank, and will give safe passage to Palestinians using them. The airport in Gaza can open, and Yasser Arafat's plane will not be searched when it uses it. A timetable and plans for a Gaza seaport are put off for later resolution.
THE FUTURE: Negotiations on a Palestinian state, borders, the 3 million Palestinians refugees, water rights and the status of Jerusalem will begin immediately and should end by May next year.Reuse content