"Arafat balked at not having sovereignty over all of East Jerusalem, including the Temple Mount." That's former President Bill Clinton's version of the defining moment of the failed Camp David summit of 2000. "He turned the offer down." Clinton "called Arab leaders for support," but "most wouldn't say much." Not one of them was brave enough—or stupid enough—to take the credit and the blame for helping Palestinian Authority Chairman Yasser Arafat give up, even if only symbolically, on Muslim control of the Temple Mount.

So, the problem of Jerusalem was not solved. And as the current Israeli and Palestinian leaders—Prime Minister Ehud Olmert and President Mahmoud Abbas—again inch toward an agreement, an old reality is suddenly dawning on both of them, and on the American facilitator: Reaching an agreement on Jerusalem will demand more time and more creativity than the timetable for agreement (the end of 2008) can provide.

Jerusalem is the main reason we hear Olmert and Abbas talking about an agreement of principles rather than an agreement. This is the question on which no weak leader—and both are weak politically—can compromise. Olmert is under constant threat that Shas, the right-wing religious party, will leave the ruling coalition if Jerusalem is so much as discussed in the peace negotiations. Abbas, like every Arab leader, is under the more severe threat that he will become a target of violence by Muslim radicals if he decides to make compromises and accept an offer similar to the one Arafat rejected.

Olmert's life is complicated by more than just Israelis' opposition to compromises on Jerusalem. In the last several months, he has also faced a revolt by diaspora Jews, who are making demands strangely analogous to the claims of Muslims in the broader Arab world. Abbas can't give up on Muslims' historic claims over the holy sites of Jerusalem, and Olmert is hearing similar voices from the Jewish community, especially in the United States. The more extreme advocates for diaspora input say he does not have the right to compromise on Jerusalem without broader Jewish consent. More moderate voices concede that the final decision will be taken by Israel, but they demand to be consulted, whatever that means.

Israelis do not necessarily like the idea of diaspora Jews meddling in the affairs of the state. A survey conducted for the Jewish organization B'nai B'rith International a couple of weeks ago revealed that Israelis' view on this issue is largely driven by their political stance. The more traditional an Israeli is, the more he opposes concessions in Jerusalem: Fifty-one percent of secular Jews, 80.1 percent of somewhat observant Jews, and 91.1 percent of strictly observant Jews oppose concessions in Jerusalem.

And what about the right of American Jews to be part of the decision-making process? Thirty-one-point-seven percent of secular Israelis do not want them involved, but for religious Israelis the opposite is true: Almost 60 percent want U.S. involvement, probably hoping it would make Olmert's life more difficult when it comes to the holy city.

Jeffrey Ballabon of the Coordinating Council on Jerusalem—a U.S. umbrella organization that supports a Jewish Jerusalem—told me a couple of weeks ago that he doesn't feel the need to justify his actions. "Jerusalem is the birthright of all Jews everywhere," and the fact that Jerusalem it is now part of the state of Israel is merely a technicality. "No one and nothing has to give us the right [to fight for the city], because politics is about leverage and power, and we are exercising that which is available to us."

Olmert doesn't like this approach. When he visited the United States in November 2007 for the Annapolis summit, he gave an angry response to a question on the topic. First, he said, there's no question that political decisions about the future of Jerusalem will be Israel's to make. Later, he blamed "Jewish decision" activists for playing politics. "The Jerusalem issue has become routine. They used it against [Shimon] Peres [in the 1996 election]; they tried it with [Ehud] Barak [in the 1999 election]; and are trying it with me."

The prime minister's suspicions were further inflamed by a letter from Ronald Lauder, the leader of the World Jewish Congress. Lauder, a supporter of Olmert's rival, Likud leader Benjamin Netanyahu, wrote that "[w]hile recognizing Israel's inherent prerogatives as a sovereign state, it is inconceivable that any changes in the status of our Holy City will be implemented without giving the Jewish people, as a whole, a voice in the decision." Olmert retaliated by canceling a planned speech to the WJC's board of governors.

Elsewhere, Olmert kept his anger in check. His advisers told him his attitude had alienated U.S. Jewish leaders—leaders Israel wants to keep onside. According to a recent American Jewish Committee survey of Jewish-American public opinion, a majority of diaspora Jews oppose compromises in Jerusalem. Complicating matters even further, the more active on Israeli issues the Jew is, the more he is prone to oppose concessions.

So, in a conversation with the Conference of Presidents of Major American Jewish Organizations in mid-January, Olmert was more conciliatory: He told the attendees he wants their voices to be heard on the future of Jerusalem. Last week, meeting many of those leaders in Jerusalem, he tried, again, to calm things down. He told them Jerusalem "will be the last issue that is negotiated upon. It is the most sensitive issue and the most difficult." And he assured them he will listen.

But the exact role of world Jews was not determined, and it never can be. Not in a way that can satisfy both diaspora leaders and Israelis. Either non-Israeli Jews have a voice and some influence in this process, on the premise that Jerusalem belongs to all Jews, or they don't, because Israelis get to make decisions related to their country, their security, and their daily lives. Olmert is right in thinking this question is nothing more than a trap. If he consults with diaspora leaders and goes on to reject their advice, they'll say he didn't act in good faith. If he accepts their opinion as a real factor, how will he ever be able to reach an agreement?

Outside opinion about Jerusalem is a complicating factor for both sides, Israeli and Palestinian, but it is also a liberating excuse. To a point, both can use "Muslim opinion" or "Jewish opinion" (and haven't even mentioned "Christian opinion"—Jerusalem is theirs, too, after all) to show how difficult it is to make the necessary adjustments. To actually solve the problem, a tightly coordinated maneuver will be needed: Olmert and Abbas must decide, simultaneously, that they are willing to ignore "outside influence" and move forward with an agreement on Jerusalem.

Should they do so? That's a matter of political opinion. Can they do it? If history teaches us anything, it's that a healthy dose of skepticism will not be misplaced. Not when it comes to Jerusalem.