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When Schreiber asked about the hostages, he was told that the Palestinians would shortly deliver their demands. At 9 a.m. the Arabs tossed out of a window a message in English that listed 200 Arab prisoners presently held in Israeli jails and demanded their release. Also on the list were the names of Ulrike Meinhof and Andreas Baader, leaders of a gang of German leftist terrorists that had robbed at least eight banks, bombed U.S. Army posts and killed three policemen before the last members were captured in June, and Kozo Okamoto, the Japanese terrorist who took part in last May's massacre at Tel Aviv's Lod airport, in which 26 people died. As the police read the list, the Olympic Games continued only 400 yards away, and 2,000 cheering fans —many of them still unaware of the drama—watched a volleyball game between West Germany and Japan.
The Palestinians insisted that they and their prisoners must be flown out of West Germany to any Arab nation except Lebanon or Jordan, aboard three airplanes that would leave at intervals. The youth in the white hat, who had pulled a stocking over his face as a disguise, said that authorities had three hours, until noon, to comply. If they did not do so, the hostages would be executed at the rate of two every 30 minutes.
By then a hot line was humming between Munich, Bonn—where Chancellor Brandt had been awakened with the news at 6:35—and Jerusalem. In Israel, where it was one hour later, Premier Golda Meir summoned her senior advisers to the subterranean Cabinet room of the Knesset building. It did not take them long to decide: 1) not to negotiate with the terrorists or release any prisoners, 2) to tell the Germans that they had full responsibility for any rescue action and 3) to indicate that Israel would not object should the Germans give the terrorists safe-conduct out of the country—provided that they received ironclad guarantees that the hostages would then be freed.
Thus West German Interior Minister Hans-Dietrich Genscher, taking charge of the negotiations, was tightly limited in the decisions that he could make. Genscher bargained with the terrorists personally, and offered them an unlimited sum of money for the release of the Israelis; the Palestinians brusquely turned down the offer. Genscher then offered himself and other West German officials as hostages in the Israelis' place, but again he was rebuffed. He stalled for time by insisting that he was slowly persuading the Israelis to change their decision about releasing prisoners. In fact, as Police Chief Schreiber later put it, the Germans were convinced that "the hostages were already dead" —meaning that their fate had been sealed by the decision not to comply with the terrorists' demands.