The cause seems to have been personal tension between the President and the Prime Minister as much as any substantive issue. Mr Clinton wanted to take the credit for a deal; Mr Netanyahu wanted to make it clear that he had won out over the Americans, and was not going home empty-handed. The result was a stand-off that threatened to destroy eight days and nights of talks.
The Americans have hinted at a stronger stance against Israel for a year, saying that if Mr Netanyahu did not move towards agreement it would reconsider its support for thepeace process. That proved to be a hollow threat.
But the US knew that the key issue would be to get Israel to agree to a security plan. What was uncertain was how far Mr Clinton was willing to go.
When the Israelis threatened to walk out of the talks on Wednesday night because they were unhappy with the security deal negotiated with the Palestinians, America apparently refused to yield any further, and Mr Netanyahu stayed to negotiate.
Mr Netanyahu almost certainly believed he could defy the President quite safely. He was a court favourite in the days of Ronald Reagan, and has many close friends on the American political right. He was Israel's ambassador to the United Nations and is in some respects as American as he is Israeli.
He almost certainly assumed that Mr Clinton, weakened by the inquiry into his affair with Monica Lewinsky and facing Congressional elections, would be vulnerable.
The Americans appear to have been talking all week, in private, about the issue of Jonathan Pollard, jailed for spying for the Israelis, and Azzam Azzam, an Israeli spy in prison in Egypt. The Israelis, at least, believed that they won agreement to free both of them.
Foreign Minister Ariel Sharon said that this was "an integral component" of the deal. In return, the Israelis say, they agreed to free more Palestinian prisoners than they had originally intended, and agreed that a key Palestinian, who they had targeted for arrest, could remain at large.
The release of Pollard would be a highly delicate matter, and the idea seems to have been to deal with it quietly in the coming months, so that it would not have been directly attributable to the summit.
But when a deal between Israel and Palestine was already in the bag early yesterday morning, Mr Netanyahu met privately with Mr Clinton and reportedly said that he wanted Pollard to leave immediately. This would have made the link between the summit, the package and Pollard all too apparent. Mr Netanyahu could have returned with both the spy, and Mr Clinton's scalp. This was too much for the Americans.
Many would see an American concession in order to secure a deal as selling out national security to promote Mr Clinton's political fortunes. The very idea of the release enraged conservatives, diplomats and the intelligence community. So the Americans refused a deal.
But the news leaked out, causing the Administration intense embarrassment and putting the main deal on hold for seven hours.
Now, the headlines in the US will focus on Clinton's embarrassment, on Pollard, on the near-failure to deal rather than the President's long hours spent negotiating and "Clinton the peacemaker."
The affair does not reflect well on the Israelis, but it also makes the Clinton administration appear secretive, duplicitous and even inept.Reuse content