The most striking concession to emerge from the Palestinian-Israeli talks this week came neither from the Israelis nor the Palestinians, but from the Bush administration.

The United States agreed to become the sole arbiter of peace agreements between the sides -- not only an about-face from a seven-year policy of "let the sides duke it out," but an unprecedented venture into waters even the hyper-involved President Clinton feared to enter.

Reading a joint Israeli-Palestinian declaration at the outset of the conference here, President Bush said the parties "commit to immediately implement their respective obligations under the performance-based road map to a permanent two-state solution to the Israeli-Palestinian conflict issued by the Quartet on 30 April 2003 -- this is called the road map -- and agreed to form an American-Palestinian and Israeli mechanism led by the United States to follow up on the implementation of the road map."

The "road map," launched by the diplomatic quartet of the United States, Russia, the European Union and the United Nations, required in its first stage that Israel freeze West Bank settlement and the Palestinians combat terrorism.

While the plan remains on the table, it now seems the other members of the Quartet are no longer relevant.

"The parties further commit to continue the implementation of the ongoing obligations of the road map until they reach a peace treaty," Bush said. "The United States will monitor and judge the fulfillment of the commitment of both sides of the road map."

Mark Regev, the Israeli foreign ministry spokesman, said the Americans have the confidence of both parties.

"The role of the international community is not to supplement that" American role "but to support the dialogue between Israel and the Palestinians."

Nabil Abu Rudeineh, the Palestinian delegation spokesman, said the Palestinians would have preferred the Quartet, but were willing to settle on the Americans alone on Israel's insistence. The critical issue, he said, was having a third party. "The Americans are willing to do it alone," he said.

Sources in various diplomatic camps said the arbiter role was not one welcomed by the Bush administration. The Israelis and the Palestinians made the case that a sole arbiter was needed if the process was to get off the ground, especially if they were to meet their self-imposed deadline of December 2008.

That nod to process was perhaps the most significant development of the conference, and one that diplomats said was in the works for two months. It also was one that had been kept under wraps -- as recently as Sunday, Stephen Hadley, Bush's national security adviser, was saying that a joint declaration was neither necessary nor desirable.

Some of the participants were taken aback. Europeans reportedly were unhappy at having been written out of a process that they, more than any other party, are underwriting in terms of funding the Palestinian Authority.

Saudi Arabia had qualms. Its foreign minister, Prince Saud al-Faisal, said it was "absolutely necessary to establish an international follow-up mechanism that monitors progress in the negotiations among the parties, as well as the implementation of commitments made."

The United States alone was not likely to meet the Saudi's definition of "international."

However close the parties had come on process, substantial gaps remained on substance. Mahmoud Abbas, the Palestinian Authority president, cited U.N. Resolution 194, passed in 1949 and calling for the return of Palestinian refugees to their homes, as a basis for the talks.

Israeli Prime Minister Ehud Olmert cited Bush's April 2004 letter to Israel rejecting such a return as a basis for negotiations.

Olmert, however, for the first time formally acknowledged a role for Israel in helping refugees resettle in a Palestinian state, and his sweeping rhetoric suggested how far Israel had come in recognizing the issue. He implicitly cast Palestinian suffering as a cause for terrorism.

"I know that this deprivation is one of the deepest foundations which fomented the ethos of hatred towards us," he said. "We are not indifferent to this suffering. We are not oblivious to the tragedies you have experienced."

Abbas adopted more of a defensive posture, framing his obligation to battle terrorism more as part of his responsibility to fellow Palestinians than to Israelis.

"The government of the Palestinian National Authority works tirelessly and without any wavering under extremely difficult conditions to achieve this noble goal that represents first and foremost a Palestinian national interest before it becomes a political requirement that is imposed by signed accords or the road map," he said.

It was not clear yet what the significance was of the more than 40 nations -- including some 20 Muslim and Arab nations -- that attended the conference.

Much had been made of the presence of Prince Saud, yet the rhetoric of the Saudi team and its refusal even to shake hands with the Israelis placed them firmly in a pre-peace conference frame of mind, despite Olmert's appeal for recognition in conjunction with the Israeli-Palestinian process.

Adel al-Jubeir, the Saudi ambassador to the United States, said his country would not recognize Israel until it had achieved peace with the Palestinians, Syrians and Lebanese. He also rejected recognizing Israel as a Jewish state.

"There are 1.5 million civilians in Israel who do not define themselves as Jewish," Adel al-Jubeir told reporters. "We do not believe states should define themselves according to religion or ethnicity."

He dismissed calls for a handshake as premature.

"This is a serious effort, we are not here for theatrics," al-Jubeir said. "The time for handshakes will come when there is a peace agreement."

The first clear indicators of success, diplomats said, would be whether the sides meet a Dec. 12 deadline for establishing a steering committee and how much financial support Tony Blair, the former British prime minister now guiding the Palestinians in building institutions, will muster by Dec. 17, when a donors' meeting is scheduled to take place in Paris.

The Saudis also called for simultaneous negotiations with Lebanon and Syria; that did not seem on the horizon.

Despite the Syrian agreement to participate, Olmert did not mention Damascus, and in a sudden departure from his focus on Israel and the Palestinians, Bush implicitly rebuked Syria for interfering in Lebanon.

"The people of Lebanon can know that the American people stand with them, and we look forward to the day when the people of Lebanon can enjoy the blessings of liberty without fear of violence or coercion," the president said.

The substance of the conference bubbled underneath the rhetoric, Daniel Ayalon, the former Israeli ambassador, told JTA. It's importance, he said, was the united front it presented against Iran and other radical rejectionists of peace with Israel.

"There's no doubt about the success of Annapolis," said Ayalon, now the co-chairman of Nefesh b'Nefesh, a group that advocates and facilitates immigration to Israel. "It is the achievement of the United States to bring this array of Arab League foreign ministers together with Israel. There is a strong American interest and Israeli interest and regional government interest in changing the dynamics and isolating Iran."

And don't discount the importance of the process, said Martin Indyk, who served under Clinton as an ambassador to Israel and a top Middle East peace negotiator. Bush might not meet his 2008 deadline, but his achievement is in restarting the process, Indyk said.

"The next president can pick it up, and with time and energy and capital, bring it to a close," he said.

Such sentiments flew in the face of warnings from some centrist and conservative observers who believe that an increased U.S. involvement ultimately will backfire, causing more violence in the Middle East once talks eventually collapse.