When George W. Bush this week read out the words of what historians will no doubt come to call the Annapolis Declaration, the Israeli and Palestinian leaders peered over his shoulder as if trying to read for the first time the terms of the contract they had just signed.

Low down in the fine print was a clause that handed the US president ownership of the peace process as monitor and judge of their performance during the remaining year of his term.

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The question now is how he will choose to exercise that ownership in order to shepherd the two sides towards a final peace settlement by the end of next year.

The clause is something that should have pleased the Israelis, who had been demanding such an arrangement for the past four years, while the Palestinians, in spite of previous criticism of Washington’s perceived pro-Israeli bias, appear to have accepted it with equanimity.

When the Israeli cabinet reluctantly accepted the international “road map” in 2003, one of 14 conditions it imposed was that the US would be the sole monitor of its implementation. Ariel Sharon, then prime minister, wanted to ensure the exclusion of Washington’s potentially less supportive “road map” partners – the European Union, the United Nations and Russia.

“I don’t think the Israelis wanted even the US,” Nabil Shaath, a senior member of the Palestinian delegation, said on Wednesday. “For them, the US is better as an ally than as an honest broker. They tried to reduce the American presence as much as possible but that’s a difficult thing to do when you’re in Washington.”

The other members of the so-called international quartet have not been entirely cut out of the process. France will host an important donors’ meeting late this year and Russia plans a further conference early in 2008. An EU official nevertheless acknowledged US supremacy as a “necessary reality”.

Mr Shaath said of the document, which was finalised on Tuesday only minutes before Mr Bush read it out: “It was not satisfactory to us, but then it also doesn’t contain anything that pre-empts what we want. It doesn’t have anything that really hurts us but doesn’t have much that helps us.”

Israel wanted inclusion of words defining Israel as a Jewish state, something the Palestinians say would pre-empt a negotiated settlement of the Palestinian refugee question.

Members of the Israeli delegation said they believed Mahmoud Abbas, the Palestinian Authority president, would have trouble persuading his people to abandon the right of return of refugees to what is now Israel. The government of Ehud Olmert, Israel’s prime minister, would regard his failure to concede on that issue as a deal-breaker.

They assessed, however, that Mr Olmert had a slightly better chance of selling his own public the equally contentious issue of dividing Jerusalem.

“That’s a pre-negotiations stance,” Mr Shaath said. “When it comes to closure, these things will require some tit-for-tat.”

He said the main thing to emerge from the past week was international endorsement of the Palestinians as a genuine partner for peace. “For years, the Israelis passed under the rubric of the Palestinians not being a partner for peace.

“This week almost 50 delegates from around the world spoke and not one of them had a word of criticism for the Palestinians.”

In comments that reflected the Bush administration’s intensified interest in Middle East peace, Stephen Hadley, US national security adviser, told an audience at Johns Hopkins University in Maryland on Wednesday night that Mr Bush saw the establishment of a Palestinian state as part of his ”freedom agenda”.

He added that Mr Bush saw ”Hamas, Hizbollah and al-Qaeda as different faces of the same evil: a radical ideology seeking to impose its worldveiw throughout the Middle East and beyond”.