Both Israel and the Palestinians regard the city of Jerusalem as a symbol of nationhood. Both want to make the city their capital.

But it is the religious importance of the city that has proved one of the greatest obstacles to peace.

Ehud Barak, the former Israeli prime minister, insisted at the Camp David summit in July 2000 that Israel retain sovereignty over Jerusalem's holiest site, the Temple Mount or Noble Sanctuary (Haram al-Sharif), as it is known respectively to Jews and Muslims.

Even secular Israelis are unwilling to place what many regard as Judaism's spiritual heart under Muslim control.

The Palestinian leader Yasser Arafat, with strong support from the rest of the Arab world, rejected this.

The power of the issue to provoke Israeli and Palestinian antipathy was demonstrated by the reaction to Ariel Sharon's visit to the Haram in September 2000.

Palestinian demonstrations in protest at the visit provoked a response from Israel, in which nearly 50 Palestinians were shot and killed by Israeli security forces in a matter of days, leading to the onset of the Palestinian intifada.

Belated offer

Three months later, Ehud Barak's faltering administration offered "Camp David-plus" - a deal accepting the principle of Palestinian sovereignty over the Haram. But by then it was too late to halt the violence.

And it is far from certain that the Israeli public would have accepted such a deal.

Even secular Israelis are unwilling to place what many regard as Judaism's spiritual heart under Muslim control - the site where King David is deemed to have kept the Ark of the Covenant, and where Abraham nearly sacrificed his son Isaac.

The city's symbolic importance makes concessions difficult

The Haram al-Sharif is a 35-acre esplanade containing sites holy to Muslims and covering a spot that is sacred to Jews.

They believe the site of the Second Temple, whose destruction by the Romans in 70 AD came to symbolise the start of the long Jewish exile, lies under the compound.

The site is sacred to Muslims because it contains the ornate gold dome known as the Dome of the Rock.

This covers the rock from which the Prophet Muhammad is deemed to have leapt to the heavens on his steed, sealing its status as Islam's third holiest place.

Christians

Jerusalem also contains sites that are sacred for Christians, the most important of which is the Church of the Holy Sepulchre which marked the site of the Resurrection of Christ.

But the decline in numbers of Christians in Jerusalem to about 2% of the population has meant that Christian concerns have tended to be sidelined in negotiations between the Israelis and Palestinians.

The Haram al-Sharif is nominally under Palestinian control, run by Islamic authorities in Jordan and their unarmed Palestinian guards.

No leading Israeli politician is at the moment prepared to contemplate any proposal that would relinquish Israel's claim to sovereignty over an undivided Jerusalem.

But Israeli police control the entrances and Israeli security cameras monitor the surrounding Old City from every angle.

While Jews are given free access to worship at the Western Wall of the Temple Mount (the "Wailing Wall"), but only a small proportion of Palestinians get to pray in the Muslim compound.

A religious law forbids devout Jews from entering the mount, although this does not deter Jewish fundamentalists from making the occasional foray in an attempt to lay the foundations for the Third Temple, which - like Mr Sharon's heavily-guarded visit in September 2000 - provoke passionate Palestinian anger.

And despite international disapprobation, Israel's de facto annexation of the eastern part of the city has remained virtually unchallenged on the ground.

Israeli conquest

Israel regarded its capture of the West Bank from Jordan in June 1967 as an opportunity to re-unify East and West Jerusalem under exclusive Israeli control and set about achieving this in a systematic way.

Israel removed the walls and barriers dividing the western and eastern sectors of the city. It then enacted legislation to put Arab East Jerusalem under Israeli civil law - as distinct from the military administration which governed the West Bank and the Gaza Strip.

Israel's annexation of the eastern sector of the city was accompanied by the redrawing of municipal boundaries, extending them northwards and southwards.

Israel took control of East Jerusalem in 1967

In 1980 Israeli passed another law making its annexation of East Jerusalem explicit.

Although a host of United Nations resolutions have censured Israel for its attempt to change the character and status of the city, Israel has ignored them all and continues to expand its control over the Palestinian areas of the city.

Israel has expropriated about a third of the Palestinian owned land of East Jerusalem for the construction of 10 major Israeli settlements with a population of about 200,000.

Encircling the northern, eastern and southern perimeter of the city, the settlements have created a physical barrier between Palestinians in Jerusalem and those who live in the rest of the West Bank.

Concessions

The European Union supports Jerusalem's internationalisation as outlined in UN General Assembly Resolution 181 of 1947.

This recommended the partition of the territory under the British Mandate into Arab and Jewish states, with neither state having sovereignty over Jerusalem, which was to be administered by a UN Trusteeship Council.

Until the issue is resolved, almost the entire international community has avoided recognising Israel's claim of Jerusalem as its capital, and only El Salvador and Costa Rica have moved their embassies there.

Palestinians have proposed that Jerusalem should be an open city, with Israeli sovereignty in the western part and Palestinian sovereignty in the East.

In negotiations Palestinians have shown a willingness to make some territorial concessions in the West Bank, but the symbolic importance of the city to Muslims makes any concession on the status of Jerusalem a different matter.

But after more than a year of violence between the two sides, no leading Israeli politician is at the moment prepared to contemplate any proposal that would relinquish Israel's claim to sovereignty over an undivided Jerusalem.