Ehud Barak was mighty relieved to survive an opposition motion of no confidence in the Knesset this week. That gives him a breather, during the parliament's summer recess, to try to reach a final peace agreement with the Palestinians.

But there is someone else who should have been equally relieved at his political survival - Palestinian Authority President Yasser Arafat.

For public consumption, Mr Arafat has seen to it that his uncompromising policies at last month's Camp David peace summit - his refusal to so much as discuss the various compromise proposals on the vexed issue of Jerusalem put forward by the Israelis and the American hosts - was portrayed in the Palestinian media as the brave resistance of a gutsy fighter, loyal to his would-be nation, implacable in the face of pressure from the world's only superpower.

And, privately, he has intimated he felt he had no right to agree to any concessions on Jerusalem - since the holy city's status was "a pan-Arab issue" - and he feared he might be assassinated by one of his own people if he compromised either on Jerusalem or on the rights of return for millions of Palestinian refugees. But that obduracy amounts to a dangerous gamble - a gamble in which the very independence of his people is at stake. And he is fortunate indeed, that, by a narrow majority, Israeli politicians voted on Monday to keep Mr Barak in power, and so give Mr Arafat a second chance, an opportunity to moderate his positions.

As far as almost all Israelis are concerned, with the exception of some of those firmly on the left of the political spectrum, Mr Arafat has been a difficult peace partner, to put it mildly. Most Israelis believe he could have done more to prevent some of the suicide bombings that have interrupted the seven years of attempted peace-making, that he has tacitly encouraged low-level street violence against Israeli soldiers on occasion, that he could have done much more to tailor education in Palestinian schools to the new era of negotiation, that he could have done much more in his public pronouncements to prepare his people for a permanent accommodation with Israel.

And yet, in the face of right-wing derision, 56 per cent of Israelis, in elections 14 months ago, rejected the hardline, sceptical incumbent, Benjamin Netanyahu, and chose a new prime minister in Mr Barak - the candidate determined to conclude successfully the Oslo peace partnership with Mr Arafat. After three years of stagnation, Mr Barak revived the Oslo process and gradually began preparing the Israeli public for the painful price he anticipated paying in return for a final accord, a treaty marking the end of the conflict. Month by month, he and his aides let slip statements indicating a degree of willingness to compromise on the critical issue of Jerusalem, questioning whether Israel needed to maintain sovereignty throughout the municipal borders of the city, which were hugely expanded after the 1967 war.

So successful was this policy that when, at Camp David last month, Mr Barak did the previously unthinkable - began negotiating over the future of the disputed city with Mr Arafat - the Israeli public reacted with interest, concern, but not, for the most part, hysteria.

By all accounts, in the final, deadlocked days of the summit, the Prime Minister did more than merely place the Jerusalem issue on the negotiating agenda. He essentially offered to share the city - to Jews, the holiest place in the world; to Muslims, the third holiest - with the Palestinians. He considered a host of American bridging proposals designed to effect a compromise that would facilitate a permanent peace deal. The idea of Palestinian sovereignty in the eastern Arab neighbourhoods of the city came up; so too did the notion of some kind of Palestinian control in parts of the walled Old City, even on the Temple Mount - the Muslim "Noble Sanctuary," or "Haram al-Sharif".

But Mr Arafat could not, would not, be moved.

And when he returned from the summit, his tame media branding him a "national hero", the Palestinian President carried on with his traditional maximalist public pronouncements, for all the world as though the summit and Mr Barak's dramatic display of moderation had never occurred, insisting Jerusalem, "all of it", would be Palestinian, and that he would declare statehood, come what may, on September 13th.

Mr Barak hugely dented his own credibility at Camp David. He had promised before leaving he would draw a red line at dividing Jerusalem, that it would remain Israel's united, sovereign capital for ever. He can no longer make that claim. And he almost paid the price in the Knesset on Monday.

By refusing to so much as discuss a pragmatic power-sharing arrangement in Jerusalem at the Camp David summit, Mr Arafat infuriated the Americans, whose diplomatic and financial support he cannot afford to lose. By rejecting all the bridging proposals, Mr Arafat sent Mr Barak home empty-handed, to be portrayed by the Israeli right as the wimp who offered up Israel's most precious assets and got nothing in return. If Mr Barak had fallen on Monday and been replaced by a resurgent Mr Netanyahu or the official opposition leader Ariel Sharon at a subsequent election, Mr Arafat, who is 71, could have waved goodbye to the notion of establishing truly independent Palestinian statehood.

Now the Knesset has granted Mr Barak and Mr Arafat a respite. This is a second chance, a second opportunity. For Mr Arafat - and for many on either side of a conflict in which there is no status quo, only negotiated progress or bloodshed - there may not be a third.