But “peace,” in whatever language, has become an almost mythical word in the Middle East today. It seems to hark back to a time as distant as King Solomon’s or Saladin’s reign–depending on your point of view–rather than a mere 20 months ago, at Camp David, when it seemed so close. Not long ago U.S. officials were calling the Oslo peace process that culminated in Camp David “irreversible.” Now Oslo is a fast-fading memory, and all that looks irreversible is the savage cycle of Old Testament justice, death for death, day in and day out.

The story of this long descent from hope to near hopelessness–and who’s to blame for it–is a lesson in just how intractable the enmity is between two peoples who are trying, impossibly, to occupy the same pinprick of land on the map. But it also says much about the delicate nature of America’s role in the region. Today, even as Bush’s peace envoy, Anthony Zinni, makes yet another attempt at a ceasefire, the finger-pointing goes on. Many in the Bush administration believe that Bill Clinton overreached at Camp David–a view that Fleischer let slip indiscreetly a few weeks ago when he said that in “an attempt to shoot the moon and get nothing, more violence resulted.” But it may be that the Bushies, who wanted little to do with the Mideast until a few weeks ago, underreached. The violence might now have spun out of control to the point where a radicalized Palestinian populace believes that terror, for the first time, is working. After all, the latest spate of suicide bombings did seem to bring the Americans back, and last week a chastened Israeli Prime Minister Ariel Sharon withdrew his forces from Ramallah. “Bush’s biggest mistake was to say ’let them bleed’,” says former Israeli peace negotiator Yossi Beilin. “He didn’t consider the ramifications”–among them, how much the violence has undermined Arab support for targeting Saddam Hussein. The irony for the Bush administration is that its inclination to stay out of the fray may have pulled it in even deeper. And that finally is the message for Washington: some degree of U.S. involvement is critical. Only America has the leverage to stop the cycle of blood.

One thing is agreed upon: a key turning point was the 15-day Camp David summit in July 2000. That was when a decade of step-by-step moves toward peace ended, and everything was thrown on the table all at once. To be certain, mistakes were made long before Camp David. Israel’s relentless expansion of Jewish settlements in the West Bank and Gaza Strip during years of peacemaking created mistrust among Palestinians. Arafat’s failure to curb anti- Israel rhetoric in Palestinian schools and newspapers led Israelis to mistrust him. But for one moment in history, Israelis and Palestinians came within a razor’s edge of solving their 100-year-old conflict. Both sides knew it was an all-or-nothing gamble. “If the summit is a dead end, there will be war,” a senior Israeli military official told NEWSWEEK just before Camp David. And so it came to pass.

This is the tale of what happened at Camp David and the long downward spiral since, of the mistakes made and the leaders who made them, and of the lessons to be learned.

Ehud Barak was going to achieve peace in a way no one else had. And he was going to do it quickly. Elected in 1999, Israel’s most decorated soldier was a political novice but a tough Sabra with a putative 180 IQ, and a name that means “lightning.” Barak promised to seal a final peace accord with the Palestinians within a year of taking office–to resolve such long-frozen issues as the future of Jerusalem and the fate of 4 million Palestinian refugees. He had no patience for the piecemeal withdrawals–with Palestinians pocketing territory in return for more talks and vague promises of recognizing Israel–that were the hallmark of the 1993 Oslo agreement.

But from the start there were early warning signs of Barak’s hubris. “He’s very smart,” an old Army colleague told NEWSWEEK just after his election, “but he’s not as smart as he thinks he is, and he rarely listens. All his mistakes will come from this overconfidence.” So they did. Barak’s first year saw a series of tactical errors. He decided to snub the Palestinians altogether, ignore interim agreements, and deal with the Syrians at first. When the Syrians balked at a deal, he embraced the Palestinian issue–but by then Arafat wanted the same full concessions he’d offered Syria. Barak also snubbed the most experienced peace negotiators in his own government, like Shimon Peres, who had warned him against making Camp David an all-or-nothing venture. “Arafat thought everything Barak told him was some kind of trick,” says a Palestinian negotiator. “I’m convinced that if Peres was there, we could have had a deal.”

And at the summit, Barak’s put-everything-on-the-table tactics backfired. Every time Arafat balked, there was always another offer from Barak, another “red line” to be breached. Barak’s comeuppance came at the end of the first week at Camp David. Abruptly he offered to do what every Israeli leader had vowed never to do–give up a part of East Jerusalem and allow Palestinians to call it their capital. So sure was he that the offer would make him the de Gaulle of the Middle East that he even kept the secret from some of his advisers. So when Arafat rebuffed that proposal, Barak sank into depression. He locked himself up in his cabin in a “fury,” opening his door to no one, recalls Shlomo Ben-Ami, Israel’s foreign minister at the time, who says the seclusion lasted 37 hours.

A month later Barak made what would prove to be another mistake, failing to block Ariel Sharon’s inflammatory visit to the holy Al Aqsa Mosque, whose grounds double as the Jewish Temple Mount. Enraged Palestinians rioted, and the intifada erupted. Barak, in an interview, says the sniping about his tactical mistakes misses a larger point: it was Arafat who didn’t want to make peace. Indeed when his host, Bill Clinton, wanted to, Barak says he was even willing to take tougher issues like Jerusalem off the table.

If Barak was eager for a historic deal, in partnering with Clinton he was pushing on an open door. By Camp David, Clinton had just five months left in his tumultuous presidency. Having hosted Arafat and the much-admired Yitzhak Rabin on the White House lawn when Oslo was signed in 1993, Clinton wanted closure. “The legacy thing was a factor,” says a member of his NSC staff. The Americans clearly failed on one point: in neglecting to prepare other Arab leaders for a deal on Jerusalem, they left Arafat exposed. Even so, participants at Camp David say, almost unanimously, that it is unfair to blame Clinton. Even Robert Malley, a former Clinton staffer who later generated controversy with a pro-Arafat, “revisionist” view, says Camp David’s timing had nothing to do with the politics of legacy-building. “The reason we went to Camp David was that we had every indication that by September [the intifada] was going to happen,” he says.

Participants are agreed, too, that Clinton performed Herculean feats of mediation at Camp David. At the time, Israeli negotiator Ben-Ami called the president’s mastery of every tiny neighborhood of Jerusalem “simply stunning.” But the summit’s final moments degenerated into mutual recrimination, and backsliding. “At the end of the day, there wasn’t any version of this that Arafat was prepared to do,” says a former senior Clinton official.

The lame-duck president pushed one last time in December 2000 at Taba, Egypt, but by then his leverage was gone: he was leaving office in a month. And Arafat, Clinton said later, kept pulling out new demands, his game at Camp David. On Jerusalem, the two sides were down to dickering over final language on who would get sovereignty over which part of the Western Wall. But Arafat had renewed a demand that large numbers of Palestinian refugees, mainly from the 1967 and 1948 wars, be allowed to return–numbers that Clinton said both of them knew were unacceptable to the Israelis. Even a fervent peacenik like Beilin says they would have resulted “in the destruction of Israel.” When Arafat bid farewell to Clinton in a phone call in January 2001, three days before the president left office, he told him, “You are a great man.” “The hell I am,” Clinton said he responded. “I’m a colossal failure, and you made me one.”

How much was Yasir Arafat really to blame? Barak and Clinton were right: it was the Palestinian who made the strategic decision to reject any all-embracing deal–though he was promised, orally, as much as 96 percent of the West Bank. He never offered up a counterproposal, which incensed Clinton. Yet the baleful lesson that Arafat took from Camp David is that not only did his stubbornness get him better offers, it solidified his political base at home. Barak returned from Camp David to a tiny band of sympathizers at the airport; Arafat came back to the embrace of thousands in Gaza City. Arafat began speaking in inflammatory terms in Arabic about taking Jerusalem, while still talking peace in English. The intifada was fueled by such rhetoric.

As Barak asks bitterly now, which version of what Arafat says “is the right one? The one that we hear, once again, in English, that already brought him the Nobel Peace Prize, or the one that we hear in Arabic?” So slippery has Arafat been that no one really knows to what extent he wanted or incited the intifada. Most Israelis and Americans believe he has deftly played a double game, goading his militias to attack Israelis but deflecting responsibility. The Palestinian leader’s unofficial biographer, Said Aburish, says Arafat’s ability to play both sides of the fence, peace and war, has helped ensure his leadership for more than 30 years despite internal rivalries and external threats. But it doesn’t lead to bold decision making.

That, finally, is the most enduring indictment against Arafat: lacking the boldness of an Anwar Sadat at Camp David I, fearing for his life if he compromised, he shrank before the hard decisions. Clinton says he told Arafat that by turning down the best peace deal he was ever going to get he was guaranteeing the election of the hawkish Ariel Sharon. It did. Sharon was elected in a landslide Feb. 6, 2001, a few weeks after George W. Bush took office.

Sharon defined himself by pursuing tactics that were the opposite of Barak’s at Camp David. If talks didn’t work to quell the Palestinians, force would. But if Barak failed at negotiating his way to peace, Sharon failed at pummeling his way to victory. The Israeli leader put 20,000 troops and hundreds of tanks into Palestinian territory, and still suicide bombers struck Israel at a dizzying pace. Sharon insists he won’t drag Israelis into a war, and occasionally he’s shown flashes of restraint. But with no viable political program to offer Palestinians, Sharon gives them no incentive to stop blowing themselves up in Israeli buses and cafes.

All that seemed to come home to roost last Thursday, when a suspect who had been released by embattled Palestinian police during the latest Israeli incursion killed three Israelis in a suicide bombing. It turned out to be the same bomber George W. Bush heard about on Air Force One.

If Sharon was the un-Barak, Bush wanted to be the un-Clinton. He sought to keep the Mideast at arm’s length and revert to the U.S. role as stalwart Israeli ally. Especially after September 11, the hard-line Bush team said little as Sharon began his most aggressive incursions. But until last week, Bush did not seem to fully appreciate that the rage in the Arab world might undercut his attempt to take on Saddam.

Now the administration has done an about-face and may meet with Arafat. It has also adopted other Clinton-era measures, like CIA monitors. But the Bushies appear to have done what they said they would never do: relent in the face of terror. The White House said only that Zinni was going back to the Middle East because of the opening provided by Saudi Crown Prince Abdullah’s “peace plan,” which was first floated in a column by New York Times columnist Tom Friedman. But another senior administration official acknowledged that Zinni’s return was prompted by the level of violence as well.

Did Camp David lead to disaster finally? “I would much prefer to be accused of trying too hard to make peace than accused of not trying hard enough,” says Sandy Berger, Clinton’s former national-security adviser, in a swipe at the current administration. But the political backbiting misses the larger lesson of Camp David: given today’s mistrust and rage, a return to something like Oslo–a gradual, painstaking process under firm U.S. guidance–may be the only way back to hope.