WASHINGTON -- Nine days of grueling, often round-the-clock talks at Camp David ended in stalemate Wednesday last night when Israeli Prime Minister Ehud Barak and Palestinian leader Yasser Arafat fell short of the grim compromises needed to end 52 years of conflict.

Despite President Clinton's all-out diplomatic offensive, each side is now likely to blame the other for a failure of nerve and an unwillingness to make politically explosive concessions over issues such as the fate of Jerusalem and the right of return for Palestinian refugees.

Amid an atmosphere that White House officials described repeatedly as "difficult," the U.S. negotiating team exhausted every chance of brokering a wide-ranging peace agreement that would have marked a diplomatic triumph for the last months of the Clinton administration. Late Wednesday evening, President Clinton finally called off the talks with a curt statement saying that negotiations had concluded "without an agreement."

That the talks fell short of a diplomatic victory comes as no surprise, considering how intractable the issues are and how deep the emotions run over territory both sides consider their holy birthright. The summit, even though it ended in failure, was nonetheless seen by many as a minor victory. Top Palestinian and Israeli leaders had never before sat down to tussle over the details of a final settlement, including where to draw the lines of a new Palestinian state and how to handle the most explosive issue of all -- Jerusalem.

Deeply disappointed by the outcome, one Israeli official said that the talks had occurred in an "optimal setting" that might be difficult to achieve again anytime soon.