Daniel Grossman was in a meeting of Jewish leaders Tuesday morning, when they heard that Israeli Prime Minister Ehud Barak and Palestinian leader Yasser Arafat were leaving Camp David to return home without reaching an agreement.

“I heard the air being sucked out of the room,” the president of the San Francisco Jewish Community Relations Council said.

Grossman described himself as “deeply disappointed,” adding, “I’m very sad to see that this moment of time, with the confluence of opportunities, couldn’t have produced more in this round of talks.” The time and effort President Clinton devoted during these past two weeks was “an incredible investment on his part,” Grossman said.

Local Jewish activists, Israelis and Palestinians expressed reactions ranging from deep disappointment, like Grossman, to sighs of relief that after two weeks of intensive negotiations, Israelis and Palestinians failed to reach a compromise.

Many people mentioned they weren’t surprised. And most Jews interviewed were especially relieved that Israel would make no concessions, at least for now, when it came to Palestinian sovereignty in Jerusalem.

Lisa Gann-Perkal, director of San Francisco’s Israel Center, has lived in Israel since 1979. Working here for under a year, she described herself as “depressed and very upset.”

“Clinton said Barak was more forthcoming, and anything else [Barak] could have offered, he would have had borderline support from the Israelis,” Gann-Perkal said. “I’m glad he went and they tried, but if it was all or nothing, I’m not surprised it was nothing.”

Michal Joelson, an Israeli who has lived in Foster City for 12 years, said she has dreamt of witnessing a peace agreement in her lifetime. “But I don’t think Jerusalem should have been on the table; it’s not a matter for negotiation.”

Pointing out that Muslims look to Mecca when they pray, while Jews look to Jerusalem, Joelson said the Holy City should remain undivided, under Israeli sovereignty.

Pini Altman, an Israeli living in San Francisco for 10 years, said, “I think Barak went beyond what a lot of people thought is a good idea.”

Altman was surprised at some of the concessions Barak was reportedly ready to make, saying, “I don’t believe in peace at any price.

“I’m not really interested in whether Israel’s going to be popular among lefty American Jews,” said Altman. “I think it would be really easy to give up everything and have a nice ceremony on the White House lawn, but Israel has to retain enough assets to remain viable.

“I would have liked [the talks] to be successful, but not at the expense of Israel’s security and its soul,” he said.

Saïd Nuseibeh, a Palestinian-American who was born in San Francisco and serves on the board of the San Francisco Arab Cultural Center, said he was depressed at hearing the talks had failed but excited that both sides seemed committed to eventually finding a solution. Quoting the 14th-century Sufi poet Rumi, he said that both sides should keep their “eye on the golden bead at the center.”

“It’s the responsibility of those who have the vision of peace to encourage those pursuing that vision, because there are many who do not want peace, who have too much advantage in war.”

Nuseibeh said it was futile to blame either side, but he acknowledged both sides for their incredible efforts.

“We need to promote the notion that we do have a common humanity and a common future, and it’s better celebrated together than from across the divide,” he said. “I am a fervent hoper and dreamer that the Palestinians and Jews will live in peace in the future.”

Elias Botto, a Jerusalem-born Palestinian who now lives in San Mateo, said he was very disappointed, but there could be no compromise until everyone understood that “Jerusalem doesn’t belong to any one people; we belong to it.”

Although he has been in the United States since 1954, Botto said he still carries the deed of the house his family owned in Jerusalem in his pocket. He is now willing to share it — but sharing it is the only option.

At 67, Botto remains hopeful that “I can go back to my home in Jerusalem to share it with the Jewish guy who’s living in it,” he said. “That’s when peace will exist, when he becomes my neighbor.” Botto is an active member of a Jewish-Arab dialogue group.

Hanan Rasheed, a Danville resident who was raised in Dier-Dedwan, eight miles from Ramallah, is also active in a Palestinian-Israeli dialogue group, the Palestinian National Congress and San Francisco’s Arab Cultural Center. She said she could understand why the talks fell apart, since the Israelis were not willing to concede rule over East Jerusalem.

“Of course we are very disappointed, but we want an agreement that is a just agreement for the Palestinians, and this wasn’t going that path,” she said.

“No Muslim alive has the right to give up the right to East Jerusalem.”

Rasheed expressed the hope that the two sides would meet again before Sept. 13 — the deadline when Arafat has said he would declare Palestinian statehood, despite Clinton’s urging that he refrain from doing so.

Rasheed said declaring a state is long overdue. “How many more times can they postpone it?” she asked. “We need our self-rule, we need to be independent.”

Israel would only benefit from a Palestinian state, she said, because it would mean greater economic cooperation, and an end to the violence.

“Both people are really ready for peace; we just need to implement that, and I have faith that we will. Some people may believe we didn’t get anywhere, but we made a giant step.”

John Rothmann, a San Francisco Mideast analyst and KGO-Radio talk-show host, said history was weighing heavily on both leaders.

“Arafat feels he cannot be the Palestinian leader who does not gain Jerusalem and certainly Barak does not want to be known as the leader who gave up Jerusalem, and therein lies the paradox,” said Rothmann.

Recalling the oft-used quote of Abba Eban, that “the Palestinians never miss an opportunity to miss an opportunity,” Rothmann said it was made clear that negotiations would continue at a later date. However, he thought it would be inopportune for Arafat to declare a state should the talks not resume before the Sept. 13 deadline.

“If the Palestinians are going to observe the spirit of Oslo, they cannot and should not do anything unilaterally,” he said.

Rothmann emphasized that sovereignty over Jerusalem should remain in Israeli hands. “I believe Jerusalem should remain a united, undivided city and the eternal capital of Israel.”

Helene Klein said she knew that the majority of American Jews did not agree with her, but that didn’t lessen her conviction that the collapse of the talks was actually a victory.

“God is on our side,” said the chair of the Northern California chapter of Americans for a Safe Israel. “An agreement would mean that the Arabs won.”

Klein said that Arafat has hardly kept his plans – the destruction of Israel – a secret. “The Palestinians say it from morning to night and the Jews don’t want to listen,” the San Francisco resident said.

Elliot Brandt, regional director of the American Israel Public Affairs Committee, said it was important to recognize that “Ehud Barak opted for no deal, as opposed to a bad deal.”

Brandt agreed with the remarks Clinton made at a White House press conference: When it came to coming to a compromise over Jerusalem, “it’s clear that the prime minister of Israel was willing to make deeper concessions than any other prime minister in Israel’s history.”

Barak, Brandt said, “took great pains to not only prepare the negotiating team, but the people of Israel for painful concessions.”

Rabbi Stephen Pearce, president of the Northern California Board of Rabbis and senior spiritual leader of the Reform Congregation Emanu-El, called the peace talks “an event whose time has come but hasn’t arrived. This protracted physical battle is one that has to end, and doesn’t serve anyone well.”

Pearce spoke of the economic opportunities that awaited the Israelis and Palestinians, if only they could compromise, and bemoaned the high price both sides will have to continue to invest in defense. “It’s just postponing the inevitable,” he said.

Dr. Michael J. Franzblau — who holds leadership positions with AIPAC, the Anti-Defamation League, Zionist Organization of America, and Facts and Logic About the Middle East (FLAME) — said “land for peace as a concept is pure folly. ” There has been “no accommodation on any level from the Palestinians since they signed [the] Oslo [accords] in 1993.”

Franzblau, who lives in Greenbrae, emphasized his comments were his own, not from any of his affiliations. He also said taking a break of a year or more prior to further negotiations taking place would be a good idea, as a test to whether the Palestinians are serious about making peace.

The Palestinians “can’t even say ‘Israel’; they call it the Zionist Entity,” he said. “This is not a sign of a people who are serious. The whole thing is a fraud.”

Gerardo Joffe, president of the S.F.-based FLAME, sounded a similar note, saying, “I believed all along that this ‘summit’ could not be successful because the demands of Mr. Arafat and his Palestinians were incompatible with what Israel is able and willing to give them.”

The Jewish state cannot concede any part of Jerusalem, Joffe said, nor can it “allow the influx of large numbers of so-called Arab refugees.”

Joffe expressed his hope that new elections are held soon in Israel, and that a prime minister from the opposition Likud Party is elected. That premier, he said, “will be more realistic in what he can offer the Palestinians, and still assure the survival and prosperity of his country.”

Raquel Newman, a longtime San Francisco peace activist and philanthropist, used a simpler assessment of the complex summit.

“Everyone tried their best. Making peace is much harder than making war.”

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Alix Wall is a contributing editor to J. She is also the founder of the Illuminoshi: The Not-So-Secret Society of Bay Area Jewish Food Professionals and is writer/producer of a documentary-in-progress called "The Lonely Child."