TWO factors appear to stand in the immediate way of a peace deal between the Palestinians and Israel. One is the sensitive issue of control over East Jerusalem; the other is the US elections. Outwardly, little appears to have changed since last month's breakdown of the Camp David peace talks between Palestinian leader Yasser Arafat and Israeli Prime Minister Ehud Barak. Following the collapse of the talks, Mr Arafat set off on an international tour, ostensibly to drum up support for his intention to declare an independent Palestine after September 13 - the scheduled date for the Camp David talks to finish. But the message from world leaders has been clear: do not declare independence without first securing a deal with Israel. In truth, Mr Arafat must know this will be the only way to proceed. Mr Barak has warned that a declaration of independence would lead to retaliation by Israel. Nothing is specified, but Israel's ability to exert an economic stranglehold on the fledgling state must be a possibility. Mr Arafat's world tour is no more than a face-saving device. It will transmit a message of caution to the Palestine National Council, which will - in the light of the international community's implied reluctance to provide vital aid for a unilaterally formed state - almost certainly urge moderation. Mr Arafat will then be able to argue that he must abide by the will of this democratically elected institution. Gamesmanship aside, East Jerusalem remains the real barrier to a peace deal. Israel has shown a willingness to grant the Palestinians control of some parts of Jerusalem - those of greatest Muslim significance. But to Mr Arafat and other Arab states, leaving Israel in control of any part of East Jerusalem is unacceptable. Any hope for a breakthrough now lies in US efforts to bring about more flexibility from both sides. All parties are aware that time is running out: Mr Barak will come under pressure from hardliners when the Israeli parliament resumes in the autumn; and the US administration's capability of acting as peacemaker will decline as domestic elections near. Mr Arafat must sense that a peace deal - which would almost certainly include his professed ambition of an independent Palestinian state - is within grasp. Now is the time to head back to Camp David for one more attempt at peace.