The major issues dividing Israelis and Palestinians, to be discussed at the Camp David summit:

Borders: The Palestinians demand that Israel withdraw from all territory it captured in the 1967 Mideast War, meaning the West Bank and east Jerusalem, captured from Jordan, and the Gaza Strip, captured from Egypt. They wish to establish an independent state in these areas.

Israel insists it won't return to 1967 borders, won't withdraw from east Jerusalem and will retain a presence in the Jordan Valley, which it views as a crucial buffer zone against foreign invasion. Israeli Prime Minister Ehud Barak, however, is said to be willing to give up close to 90 percent of the West Bank — a position that has angered right-wing parties.

Jerusalem: The Palestinians want to establish their capital in east Jerusalem, alongside that of Israel. Israel insists the city must remain united, under exclusive Israeli sovereignty, as Israel's capital.

However, there have been reports of possible Israeli concessions, such as allowing the Muslim trust that controls the mosques on the Temple Mount, or Haram as-Sharif, to fly the Palestinian flag there. There have also been unconfirmed reports that Barak is willing to discuss Palestinian administrative autonomy in the Arab neighborhoods of east Jerusalem.

Another much-discussed idea is to expand the borders of the city to include the Palestinian suburb of Abu Dis, where the Palestinians would base their capital.

Jordan Valley: Since 1967, Israeli governments have vowed that no foreign army must ever be allowed to cross the Jordan River and that Israel must retain control of the Jordan Valley in order to ensure this.

In recent weeks the Barak government has indicated that it is willing to return a substantial part of the valley to the Palestinians. The Palestinians demand all of it.

Settlements: The Palestinians demand that Israel evacuate all the Jewish settlements in the West Bank and Gaza Strip. Barak has proposed that the more isolated settlements be evacuated and their residents moved into large settlement blocs, where the vast majority of settlers live at present.

Under the Barak proposal, Israeli sovereignty would be extended to these settlement blocs. So far the Palestinians have rejected the idea, although there have been hints of flexibility.

Refugees: Palestinians maintain that their refugees have the right to return to former homes in what is now Israel. Israel rejects this demand; Barak has repeated in the last few days that Israel will never "accept moral or political responsibility" for the creation of the Palestinian refugee problem in the 1948 Arab-Israeli war.

Israel maintains that the problem of the refugees should be solved with international aid, in the countries where they now live.

Various compromises have been floated involving some kind of compensation for the refugees.