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Israeli Prime Minister Ehud Barak and Palestinian leader Yasser Arafat returned home Wednesday from their failed talks at Camp David to vastly different welcomes and shrunken hopes for an imminent deal sealing the long, bloody Arab-Israeli conflict.

Greeted by jubilant masses in the Gaza Strip, after stopping in Egypt to brief President Hosni Mubarak, Arafat was hailed as a brave negotiator who had withstood pressures from the Americans and Israelis.

“Jerusalem is the capital of a Palestinian state, like it or not. And whoever does not like it can go and drink from the sea of Gaza,” Arafat declared upon his arrival at the Palestinians’ airport in the Gaza Strip. He said the search for peace would continue but emphasized that the Palestinians would not compromise on issues such as their claim to Jerusalem.

Barak delivered a short, somber speech on his arrival at Ben Gurion Airport, where political allies, friends and relatives of victims of Arab violence greeted him warmly. Right-wing foes demonstrated on the road from the airport to Jerusalem and awaited Barak at his heavily guarded Jerusalem home.

“We didn’t succeed because our Palestinian neighbors still have not realized that for real peace you must give up some of the dreams; you have to give, not just take,” Barak said moments after leaving the plane that carried him home from the U.S.

But the Israeli prime minister, who had pushed for the U.S.-sponsored summit as a solution for long unresolved bargaining issues with the Palestinians, insisted that he was not giving up his quest for a deal.

“In your names, in the names of the millions of eyes still looking, hoping and praying, I promise not to despair, not to tire, not to stop pursuing peace,” Barak said. At the same time, however, Barak warned the Palestinians that Israel would be ready to meet any “test” of violence from them.

The White House said U.S. envoy Dennis Ross will travel to the region in the coming weeks to gauge any post-summit progress, but officials ruled out follow-up negotiations in the United States any time soon.

“If there is going to be an agreement here, it must be one which meets the legitimate interests of both parties,” Clinton told reporters at the White House. “And that requires a certain imagination and flexibility of defining those interests and figuring out an institutional and legal framework for them that, frankly, just takes more time and more reflection and probably less pressure than was available in our 15 days at Camp David.”

Meanwhile, Israel’s military leaders said Wednesday that they had put their troops on special alert in the occupied areas, although they had not beefed up forces. Israeli news reports said one military commander in the West Bank had issued new weapons to some settlers and had called for more training for them.

Barak now faces a major test from the fallout of the two-week summit, which Israeli negotiators and U.S. officials claim collapsed because the Palestinians refused to compromise on Jerusalem.

Even his supporters agree that Barak, who was swept into power last year by a strong margin–prompting Prime Minister Benjamin Netanyahu to quit politics–will have to fight to stay in office.

Barak “is in deep trouble,” said Israeli pollster Hanoch Smith, explaining that just under one-third of Israelis surveyed recently thought Barak has been doing a good job. That’s the lowest rating Barak has received so far, according to Smith.

After Israelis heard the news of the collapse of the Camp David talks, a poll conducted by Smith showed that 52 percent were dissatisfied by the role Barak had played in the negotiations, with only 34 percent praising him.

The poll also showed that 57 percent of those surveyed felt Barak had offered too many concessions to the Palestinians.

This is a sentiment Barak’s right-wing foes have seized upon, accusing him of stretching the borders of bargaining to points never reached before by any Israeli leader.

While Israeli officials have not detailed what they offered the Palestinians, the Israeli news media have widely reported on them. The newspaper Ma’ariv on Wednesday said some of the deals called for Israel to:

Turn over 90 percent of the West Bank and Gaza Strip, areas that Israel captured in the 1967 war, to the Palestinians.

Maintain its rule over most of the 190,000 Israelis living in settlements in the occupied areas.

Allow thousands of Palestinian refugees to be united with their families inside of Israel while not conceding their legal right to return.

Permit the Palestinians to set up a capital in Arab villages surrounding Jerusalem, and guarantee passage to Muslim holy sites in the city but not surrender Israel’s rule over Jerusalem.

Barak left for Camp David in a serious political fix, and the situation only worsened while he was there. His ruling coalition government was threatened before the summit, because three of his six coalition partners rejected the bargaining overtures he had made to the Palestinians.

During Camp David, criticism of Barak from right-wing foes for his concessions grew markedly, while left-wing allies questioned whether he was trying hard enough to make a deal.

The likelihood of bringing together many of these political opponents in a ruling coalition now seems unlikely, politicians and analysts say.

Joseph Alpher, an independent political strategist who briefly served Barak as an adviser on the peace process, said, “Barak has a peace mandate [from voters] but not a stable peace coalition.”

Barak may be able to avoid a political showdown in the coming days, however. Ruben Rivlin, a member of the Israeli Knesset, or parliament, from the right-wing Likud Party, said Barak’s foes are three votes short of the 61 needed to win a no-confidence vote.

With the Knesset scheduled to begin its summer recess Aug. 6, reconvening Oct. 29, Rivlin said Barak will be “able to get away for now.” But, Rivlin added, “immediately after the vacation, there is no way he [Barak] can continue without a real coalition.”

Another political track is also possible.

A much-decorated army leader with a penchant for strategic planning, Barak may join his opponents in calling for elections, setting the date in the fall or early next year. That way, analysts said, he would give himself new political oxygen as well as set his own deadline to find allies.

Another possible scenario posits the return of Netanyahu. As the Camp David talks slogged on last week, Netanyahu appeared on Israeli television to offer his concern about the apparent direction of the talks.

He presented a soft-spoken and emphatic image that contrasted with his reputation as an angry political leader who felt hounded by the news media and deserted by old allies.

The fact that Israeli television afforded prime viewing time to private citizen Netanyahu fascinated Israelis and set off endless talk on radio and in the newspapers about a comeback for Netanyahu, who has risen from the political graveyard before.

Many within Likud who fought with Netanyahu, or who felt deserted by him, are not likely to welcome him back now, analysts said. But some party members sense an opportunity for Netanyahu’s political resurrection.

“Israelis now understand that Netanyahu was a good and even great prime minister. The effect of the media’s barrage on Netanyahu throughout his tenure is dwindling,” claimed Yuval Shteinitz, a Knesset member from Likud. “It is highly probable that Netanyahu will return for the elections and win because Barak has failed twice in the negotiations with the Syria and now with the Palestinians,” Shteinitz said.

The specter of such political disarray is the opposite from that which Palestinian leader Arafat, who normally keeps a very tight rein on dissent, faced upon his return.

“He [Arafat] has reconstituted himself,” said Mahdi Abdul Hadi, the head of a think tank in Jerusalem. He was referring to previous criticism from Arafat’s political foes, who have accused him of bending too easily in peace negotiations.

Before, whenever Arafat took part in peace talks, he led the Palestinians into some form of concessions even though he had been urged not to, said Ghassan Khatib, the head of the Jerusalem Media and Communications Center, a research organization.

“But this time there were some signs of relief among Palestinians because Arafat returned without giving concessions,” he explained. “There was also no disappointment because there were no hopes,” he added.

Clearly buoyed by his welcome home, Arafat repeated his vow to declare an independent state on Sept. 13 if there is no agreement with the Israelis. The Israelis have warned they would not calmly accept such an act and similarly may take unilateral steps.

These threats have raised concerns about a new cycle of violence.

But Arab and Israeli analysts suggest that Arafat is leaning on his long experience as a guerrilla leader to make threats in order to increase his bargaining power. A declaration of a new state, they add however, is unlikely to take place while Israel faces a political crisis without a strong prime minister.

“This is the difficult end of the beginning,” suggested Abdul Hadi. “There are no more taboos, but this educational process will take some time.”