Camp David had from the outset been something of a Hail Mary maneuver, because it was always going to be a lot safer for both Arafat and Barak to return home without a deal than it would be having inked one their constituents might view as a betrayal. The Oslo Agreement had deliberately postponed the questions discussed at Camp David, and it was not for lack of trying that the negotiators there failed to reach agreement. The more chilling reality may be that no final agreement is possible yet between Israelis and Palestinians: Their competing claims on Jerusalem, as well as conflict over borders, settlers and refugees, are a reminder that the Oslo Accords may have stabilized the conflict but have ultimately failed to induce the historic settling of accounts between two peoples whose very national identity has for decades been mutually exclusive.
All three leaders at Camp David suffered defeat. President Clinton, who invested an unprecedented proportion of his presidency trying to resolve this particular regional conflict, will have to settle for yardage rather than a touchdown. Barak may have averted a showdown with conservatives, but they're unlikely to return to his fold and he'll have to fight the perception that he's failed in the very mission for which Israelis elected him: to make peace with the Syrians and Palestinians.
Arafat may have boosted his domestic support by standing firm on Jerusalem, but support on the Palestinian street doesn't make the choices he now faces any easier. Arafat had invested everything in the peace process, and has the most to lose by its failure his vow to declare a state without Israeli agreement come September could potentially plunge the region into a new round of instability, which neither Arafat nor any of his backers will relish.
The immediate future for the region may be containment rather than final resolution of the conflict. The potential for conflict may have expanded now that the core differences between the two sides have been aired but not resolved. But that potential also functions to keep them talking to each other. After all, they found their way to Oslo without Washington's help, driven only by the realization that conflict led nowhere. Even without a final agreement, then, both sides have no realistic alternative but to keep talking.