The Jerusalem clauses in the Israeli-Jordanian declaration, signed in Washington on Monday, have caused dismay among many Palestinians who believe that the deal is a Jordanian-Israeli conspiracy, designed to undermine the PLO's chances of winning East Jerusalem as its capital, and, thereby, also undermining the PLO's chances of creating a Palestinian state.
The clauses have caused concern among some Israeli strategists, who fear that the Prime Minister, Yitzhak Rabin, may have underestimated the level of bitterness between Mr Arafat and King Hussein, which could erupt, causing untold damage to the delicate peace process.
In recent months eyes have focused on the minutiae of the Gaza-Jericho plan. But the Jerusalem question has all the time been looming like an increasingly dark cloud over the future of the peace process. Israel claims all Jerusalem is its sovereign land, while the Palestinians claim the Arab east side as their capital.
In theory Jerusalem should not be discussed until talks on the final status of the occupied territories begin in two years' time. In fact, political power-play over control of the city began long ago. Israel is well ahead in the game, after speeding up Jewish settlement on Arab lands and strangling Palestinian institutions on the Arab east side.
In the new Israeli-Jordanian declaration, Israel hopes to have played another ace by formally recognising Jordan's guardianship of Jerusalem's Muslim sites for the first time. Until now, Jordan's custodian role, since the 1967 Arab-Israeli war when Israel seized the east side of the city from King Hussein's Arab Legion, has only been recognised by Israel de facto. Furthermore, Israel has promised that Jordan will be given 'high priority' when talks on the final status of the city begin.
For Israel, King Hussein is an infinitely preferable negotiating partner on the issue of Jerusalem than Mr Arafat, because the King's only stated concern is with preserving East Jerusalem as a Muslim religious capital. Yesterday in Washington he tried to defuse the row by stating: 'My religious faith demands that sovereignty over the holy places in Jerusalem reside with God and God alone.'
King Hussein has no wish to get involved in the far more painful debate over political status. It was no coincidence that Israeli hardliners such as Ehud Olmert, mayor of Jerusalem, welcomed the Israeli deal with Jordan, in the hope that the PLO's political claim will now be sidelined.
For King Hussein the declaration also serves a vital purpose. It enhances the Hashemite claim as supreme saviour of Islam's third holiest site - the Haram al-Sharif - thereby boosting his standing in the Arab world, and scoring points over Saudi Arabia's King Fahd.
'Arafat represents the sovereign claim to Jerusalem. The King represents the religious claim,' said Dori Gold, a leading Israeli analyst at the Jaffee Centre for Strategic Studies. 'The struggle between the PLO and Jordan will be the main drama of forthcoming months. Book your seat now.'
The row which has now broken out in public over the control of the Muslim holy sites has been simmering ever since the signing of the Oslo peace accords. Mr Arafat signalled last October that he intended to press for the return to Jerusalem of the Awqaf, the Muslim sites administration based in Amman. It was also reported last autumn that Hassan Thaboub, chairman of the West Bank Islamic Council, favoured bringing the holy sites under PLO control, which angered Amman.
At the same time the King made a series of loaded speeches proclaiming that sovereignty of the holy sites belonged only to God. He also speeded restoration of Jerusalem's Dome of the Rock, which he paid for out of his own pocket, and which now dominates the Jerusalem skyline as a golden symbol of Hashemite control.