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Storekeepers and passersby waved to Shalom Levi as he strolled through the Mahane Yehuda, or Jewish market, but the tall, elderly man with a long wispy beardbarely acknowledged them. His mind was elsewhere. It has been elsewhere for days now.

His distraction began when “they,” as he called them–the Israeli, Palestinian and American negotiators–began their meetings at Camp David nearly two weeks ago and he heard talk on the street that Jerusalem might not remain solely in the possession of the Jews.

“I’m so very worried,” said the Iranian-born Israeli, an observant Jew whose large dark hat shielded his long, thin face from the burning sun. “I don’t know where we will live. I don’t know who will be in charge here. I am worried.”

From the teeming alleys of Mahane Yehuda in Jewish West Jerusalem to the cool, sun-shaded alleys of the mostly Arab Old City in East Jerusalem, a sense of uncertainty fills this ancient capital these days, shadowing the city residents whose fate is at the core of the Camp David talks.

Their uncertainty was fed by the news of serious bargaining over an American plan that would see Israel, for the first time, share control over some portions of the Holy City with the Palestinians. Michael Melchior, an Israeli Cabinet minister told reporters in Jerusalem that the Israeli plan would provide some “symbols of sovereignty” for the Palestinians.

But Israeli officials, realizing the firestorm of dissent that would erupt if the country relinquished its absolute control of the city, quickly made it clear that Israel would not give up its sovereignty over the city that Jews consider a sacred trust. In polls released last week by Israeli newspapers, most Israelis said they would reject any compromises in their nation’s control over Jerusalem as the ticket for peace after 52 years of conflict with the Palestinians.

With Prime Minister Ehud Barak eager to reach a deal–but not one that will condemn him to a political death back home–Israeli news media reported that the Israelis are also pushing a plan to resolve as many differences as possible with the Arabs, but to leave Jerusalem out of the package. The negotiations continued with informal talks Saturday at Camp David while President Clinton attended an economic summit in Japan. The discussions apparently were centering on the question of who shall rule Jerusalem.

No matter what deals Barak makes, his political opponents, reacting to news leaks of the negotiations, have already condemned him for bargaining over issues that once seemed cut in stone. One of these is Jerusalem’s fate.

What will happen, Arabs and Jews wonder, when President Clinton returns and the talks resume at full speed? Who will prevail? Will the city–their city–be divided? Will there ever be an end to the palpable tension that keeps Arab and Jewish Jerusalem apart and separate?

In the city that historically has symbolized hope for many, pessimism prevails widely. For the Jews, Jerusalem is their ancient capital. For the Arabs, Jerusalem is sacred to all Muslims, as it is for Christians. Here history is everyone’s accountant, offering facts that each side says cannot be denied.

Trudging through Mahane Yehuda, his arms dragging heavily filled shopping bags Moti Naftali, 54, an aluminum salesman, is one of thosewho says history is on his side.

“I hope they [the talks] explode. I hope they fail, and then we’ll have new elections and all of this talk of concessions will be over,” said Naftali, wholives in the West Bank Jewish settlement of Ma’ale Adummim.

Nearby, Ilanit Elbaz, 28, was trudging along, her arms lugging large plastic bags stuffed with items for her family of four. The peace talks have been very worrisome for her because she cannot see any way to divide or share Jerusalem. Nor could she recall a history of profitable bargaining with the Arabs that might encourage her.

“I’m very worried because it not clear what will happen,” said the young mother, who said that she no longer visits the mostly Arab-populated Old City for fear of what might happen to her there. Yet as she passed the stores in the market, she worried out loud about the burdens faced by the Arab boys who seemingly did all of the work.

Down several streets, and beyond a wall full of freshly mounted black and white posters that read, “Barak, you are a traitor to Jerusalem,” Shaul Galan, 52, a fashionably dressed investment adviser, hurried along.

He, too, wondered about Camp David. To him, giving up any part of Jerusalem would mean cutting “flesh from the Jews.”

“I’m worried because the Arab side is so much better at negotiations than we are,” he said, pausing briefly on his way.

“If we give something now, in the future the Arabs will want more,” he said.

Deep inside the Old City among the rows of souvenir shops, Murthana Salami also had Camp David on his mind. He follows every word of it on the radio from morning till night and reads newspapers regularly for the latest news, he said. A 24-year-old university graduate trained as a dental technician, his sales job in the small store is the best he can find, he added somewhat shyly.

From what he has already read and heard, Salami was sure that the Camp David talks would fail. But he was also certain that the Arab world would not forget Jerusalem. “In a few years, you will see. The Arabs will go to war to return Jerusalem to the Muslims,” he said.

Not everyone, to be sure, adamantly opposes sharing their windswept, sun-baked city.

Ran Morin, an Israeli who often visits Arab friends in the Old City, said he has no qualms about traveling there.

“I would like Jerusalem to be an international city. I want to share Jerusalem with the whole world, not just the Arabs,” said Morin, 42, an American-trained sculptor and architect who has designed a unique park on a Jerusalem hilltop.

On a site where Arab and Jewish blood was spilled over the years, his park uses the olive tree as a symbol of peace and the struggle for life in a troubled and harsh environment.

Moments after Morin shared his hopes for an internationally controlled Jerusalem, Father Theo, as he called himself, a Greek Orthodox priest, stopped in at a narrow newsstand in the Old City, brimming with newspapers and magazines in all languages. Father Theo was born in Greece, but raised in Jerusalem.

The short, middle-age priest with graying hair scooped up an armful of newspapers that were filled with banner headlines about the Camp David talks, eager for the latest news. Father Theo was an exception to many of his neighbors: he was full of hope for what would come from the latest meeting of two troubled peace partners.

“Of course, there are difficulties, but eventually they will reach an agreement,” he said calmly.

“Everyone here has become a pragmatist,” Father Theo said. “We are the problem and we are solution. All of us.”