Updated

The very holy sites and symbols that have lent Jerusalem its reputation as a city of peace have made the city the main stumbling block to an agreement that could end 52 years of conflict between Israel and the Palestinians.

The status of Jerusalem, sacred to three religions and claimed by both sides as their capital, is the most explosive issue at the Camp David summit. Dispute over the future of the city is believed to be the reason talks came to the brink of a breakdown Thursday.

"It seems the Israelis do not understand how important and sensitive the Jerusalem issue is for the Palestinians, and for Muslims and Christians," Ziad Abu Zayyad, Palestinian minister in charge of Jerusalem, told Associated Press Television News.

"I believe the stubborn Israeli position is a call for another war. It's a tempting invitation to all fanatics and suicide bombers to act in order to save Jerusalem."

The Israelis insist they have compromised as much as possible on Jerusalem.

Prime Minister Ehud Barak's supporters have described proposals under which Israel would extend the municipal borders of the city, and give the Palestinians more control over Arab neighborhoods. In exchange, Israel would absorb some Jewish settlement blocs on the outskirts of Jerusalem.

"We accepted the idea that we may share an expanded, united Jerusalem," Deputy Defense Minister Ephraim Sneh told APTN, "but we are not ready to redivide it."

The Palestinians have said this does not go far enough. They demand sovereignty over Arab east Jerusalem — including the walled Old City — and say there can be no peace deal without east Jerusalem as sovereign capital of the state they hope to declare this year.

Israel insists that the whole city, including parts it captured in the 1967 Mideast war, remain united under its sovereignty.

Israeli lawmaker Uzi Bar-Am, who is serving as a spokesman for Israel at the talks, says the issue of sovereignty over Jerusalem is simply too overwhelming to be resolved for now. Ongoing talks at Camp David are not likely solve the issue, he said.

There has been speculation that instead of a final peace deal, Barak and Palestinian leader Yasser Arafat might emerge with a partial agreement that does not include Jerusalem.

Bar-Am told Israel's army radio that Barak "made a huge effort" to solve the Jerusalem dispute. "I don't think he can make another effort on this and I'm not sure that Arafat's room for maneuvering on this issue is too big," he said.

To make far-reaching concessions on Jerusalem could be the political downfall of both Arafat and Barak.

For Arafat, his nightmare is to be known as the leader who lost Jerusalem and he is under tremendous pressure from his people and leaders of the Arab world not do so.

In Israel, a united Jerusalem is a consensus issue and Barak, like all Israeli leaders before him, has pledged never to divide the city.

Within the walls of Jerusalem's Old City, Jews pray at their faith's holiest shrine, the Western Wall, the only remnant intact of the Jewish Temple destroyed by the Romans in A.D. 70. Muslims hold prayers at the al-Aqsa mosque, the third holiest site in Islam, where tradition says the prophet Mohammed ascended to heaven on his horse.

Millions of Christians visit the Church of the Holy Sepulcher, where Jesus is traditionally believed to have been crucified, buried and resurrected.

Haim Ramon, the Israeli minister in charge of Jerusalem, has said for several months that the dispute over the city should be shelved for now while other core issues are resolved.

"I held many talks with the Palestinians, and they thought that we can and are willing to give up sovereignty in Jerusalem in general, and the Old City in particular. I told them, 'Dream on,'" Ramon told army radio.