ISRAEL and the Palestinians remained deadlocked on Jan. 4, making no apparent progress in their behind-the-scenes efforts to get stalled peace negotiations under way again.
Beyond their differences over the issues in dispute, a widening gap of mistrust was opening between Israel and the Palestine Liberation Organization (PLO) that does not bode well for the future of the talks.
``There has been a process of erosion of mutual trust between the two parties ever since the signing'' of the Israeli-PLO framework peace deal last September, acknowledges Gad Ben Ari, spokesman for Israeli Prime Minister Yitzhak Rabin.
As each side blamed the other for misrepresenting the results of the Dec. 27-29 meeting in Cairo, the atmosphere between them soured. But both Israelis and Palestinians involved in the negotiations say they are confident that eventually the talks will bear fruit.
``There is a bit of an impasse now, but not a very significant or deep crisis that could endanger the whole process,'' Mr. Ben Ari says. ``It is not a real crisis in the sense that there is nowhere to move from here.''
``We and the Israelis are now in the same boat,'' agrees Azmi Shuabi, an adviser to PLO chairman Yasser Arafat. ``We are heading for the shore, but we are still in the middle of the water, and neither of us can withdraw without making the situation very disastrous.''
But observers here now expect the negotiations to be painful and drawn out - a far cry from the swift accord that Mr. Rabin and Mr. Arafat had hoped for when they sealed their Declaration of Principles with a handshake in September.
The questions that are blocking progress are the same ones that have been troublesome over more than a month of inconclusive negotiations - the size of the area around the West Bank city of Jericho that is to be granted autonomy, security provisions for Jewish settlers in the Gaza Strip once that area comes under Palestinian self-rule, and the administration of border crossings from Egypt into Gaza, and from Jordan to Jericho.
Disagreements over these points have held up the Israeli withdrawal from Gaza and Jericho, which had been due to start on Dec. 13.
The most contentious problem concerns control over the border points. Israel is refusing to accept Arafat's demand that only Palestinian policemen should have the right to check Palestinian residents of Gaza and Jericho into those autonomous zones.
Arafat's insistence on this point is seen as a bid to lay the foundations for the Palestinian state he hopes will emerge from the five-year autonomy period.
Israeli officials say they have gone as far as they can in compromising with the Palestinians, and that Israel will not return to negotiations until the PLO accepts the agreement they say was reached last week in Cairo.
``We cannot possibly go on as long as that understanding is not accepted,'' Ben Ari says. ``That is as far as we can go toward the Palestinians on the issues.''
The Palestinians say there was no agreement at all in Cairo. And the squabble over what happened in the Egyptian capital indicates how far trust between the two sides has ebbed.
Rabin says he wants all future agreements with the PLO in writing, alleging that Arafat reneged on an understanding reached between Israeli Foreign Minister Shimon Peres and top Palestinian negotiator Nabil Shaath.
``You cannot negotiate effectively knowing that whatever you agreed yesterday will serve simply as another level from which to begin renegotiating tomorrow,'' Ben Ari says.
Palestinian sources, however, insist that the document presented by the Israelis as an agreement was never more than a hand-written Israeli memorandum outlining Israel's understanding of the status of negotiations, with which the Palestinian team did not agree.
``The Israelis are playing a dirty game,'' complains Ghassan al-Khatib, a member of the Palestinian negotiating team. ``It is all part of their psychological and media warfare.''
Despite the current deadlock, though, too much has changed in Israeli-PLO relations to make the failure of their peace process imaginable. On Jan. 3, for example, even as Mr. Shaath and Mr. Peres were sparring with each other in public statements, Peres twice interrupted testimony to a Knesset (parliament) committee to take phone calls from Shaath. Faxes are now a key element in the negotiations, in the absence of face-to-face talks.
The consensus among Palestinians and Israelis, as visiting British Foreign Secretary Douglas Hurd put it on Jan. 4, is that ``they have reached the point where it is easier to go forward than to go back.''
``There may be a little lack of trust,'' Ben Ari adds, ``but there is no less mutual desire, strong motivation, and an interest on both sides to see the [peace] agreement implemented.''