BY FRANK DAVIES

 WASHINGTON -- The deal to bring Elian Gonzalez and his Miami relatives here
 for a climactic meeting Wednesday with Elians dad on neutral ground, the Vatican
 Embassy, was supposed to offer something for everyone, but it foundered on the
 familys last-minute unwillingness to turn over the boy.

 According to four people involved in or familiar with the arrangements, the deal
 resulted from feverish negotiations by Sen. Robert Torricelli, the New Jersey
 Democrat who used his good connections with the major players: Deputy
 Attorney General Eric Holder, the Justice Departments principal negotiator in
 the Elian case; Gregory Craig, the fathers lawyer who worked with the senator
 during the Clinton impeachment wars; and the Cuban American National
 Foundation, a longtime ally of Torricelli.

 The four sources discussed the deal on the condition of anonymity, describing
 negotiations and details that had all the intrigue of a Cold War spy exchange at
 the Berlin Wall.

 THE DEAL

 The deal emerged this way Tuesday afternoon: Reno had just met Miami-Dade
 Mayor Alex Penelas and Miami Mayor Joe Carollo in her office, and told them she
 was willing to come to Miami to talk with family members and community
 leaders. She was with Holder and Craig when Torricelli called, relaying an offer
 from the lawyers for the Miami family and foundation leaders.

 The terms: Lazaro Gonzalez and his daughter Marisleysis, Elians principal
 caregiver since his rescue at sea in November, would come to Washington with
 Elian on a government plane, ready to transfer the boy to the father at a neutral
 site and meet with Juan Miguel Gonzalez for 30 minutes.

 The Vatican Embassy on Massachusetts Avenue, across from Vice President Al
 Gores official residence, was hastily chosen as the site, since the Vatican has
 diplomatic relations with Cuba and the United States. No government security
 agents, U.S. or Cuban, would be present.

 TWO MONITORS

 Torricelli and Holder would be at the embassy, which has diplomatic immunity, to
 monitor the reunion.

 Craig and Justice officials were interested, but several hours later, Torricelli as
 mediator relayed new conditions:

 Relatives would come up on a private charter flight, and six would attend the
 family meeting, including Lazaros brother Delfin, Elians cousins Alfredo and Maria
 Isabel Martell, and Alfredos son.

 And the relatives wanted three hours with the father, not 30 minutes.

 Craig told The Herald late Wednesday: ``Our understanding was always
 absolutely clear: Without a transfer of custody, there would be no family reunion.''

 Jorge Mas Santos, chairman of the Cuban American National Foundation, gave a
 different interpretation Wednesday, saying ``there were no preconditions'' on the
 family meeting. ``It was not to be a hand-over of Elian,'' he said.

 And Jose Garcia-Pedrosa, an attorney for the Lazaro Gonzalez family, said the
 great-uncle was not under the impression that he would be turning over the boy at
 that meeting, that it was supposed to be only an open exchange of feelings about
 the boy's future without governmental interference.

 TRANSFER ESSENTIAL

 But two sources in the U.S. government dispute that, saying that the transfer of
 custody was an essential part of the plan.

 ``The terms were known to all parties; no one was under any illusion about this,''
 said one government official.

 By 10:30 p.m., the deal was struck. Juan Miguel Gonzalez would get his son, the
 Miami relatives would express their feelings directly to him, and the foundation
 would get credit for helping craft a peaceful end to a tense situation in Miami.

 The location was set. A Vatican spokesman said: ``We agreed that a reunion
 could take place here.'' The foundation announced the deal at 11 p.m.

 Within two hours, it fell apart. Lazaro Gonzalez told a crowd outside his house
 that Elian would not go, and the family objected to the notion of a ``summary
 hand-over,'' according to a source close to the family.

 Another source said that a divided family, and a divided legal team, caused the
 deal to unravel. Holder reportedly negotiated with family lawyer Kendall Coffey --
 the two were U.S. attorneys during the early 1990s -- but other members of the
 legal team questioned the transfer of custody.

 THREE SCENARIOS

 The source close to the family had a different perspective, outlining three possible
 scenarios for the meeting: The father would reunite with his son and return to
 Cuba; the father would seek asylum to stay in the United States; and a messy
 third option -- the father would ``have to drag Elian kicking and screaming away
 from there.''

 Torricellis key role in the negotiations is not surprising. He has long, close ties to
 the Foundation, and is known in Washington as a blunt, intense deal-maker.
 Earlier in this saga, he tried to broker a compromise, with family members
 dropping some of their legal claims in return for a full hearing in immigration court.

 ``In political circles, Torricelli is well-admired for working these kinds of deals,''
 said Ross Baker, a Rutgers University political science professor.

 Torricelli has sharply criticized Reno on several issues, but has worked closely
 with Holder. The New Jersey senator has disagreed with the administration, but
 was a fierce defender of President Clinton during impeachment, when Craig was a
 leading member of Clintons team during the Senate trial.

 The foundations role in forging the abortive deal is less clear. Two sources and a
 congressional staff member who deals with Cuba issues said the Foundation was
 seeking to reinforce its reputation as the preeminent exile organization.

 HOUSE MEMBERS

 But Miamis two Cuban-American House members, Lincoln Diaz-Balart and Ileana
 Ros-Lehtinen, were clearly not happy with the proposed deal. When asked about
 it Wednesday, Ros-Lehtinen said tersely, ``Youll have to talk to [the foundation.]''

 The abortive deal, and Renos trip to Miami, also overshadowed an effort by the
 two House members and GOP leaders to portray Juan Miguel Gonzalez as
 ``under house arrest'' at the home of a Cuban diplomat in Bethesda, Md.

 House Majority Whip Tom DeLay and other leaders had sent Gonzalez a
 hand-delivered letter inviting him to a private lunch at the Capitol. He didnt show.

 ``I am deeply disappointed that Juan Miguel Gonzalez did not meet today with the
 leadership,'' DeLay said. ``Somehow, some day, I still hope he will have the
 chance to meet with us.''

 Herald staff writer Jay Weaver contributed to this report.

                     Copyright 2000 Miami Herald