Why is there no peace between Israel and the Palestinians? This article draws the line all the way back to the very first Arab-Israeli negotiations. In 1949, on the Island of Rhodes, UN mediator Ralph Bunche negotiated an armistice agreement between Israel and Egypt. The outcome of the first Arab-Israeli war constituted the immediate context for the negotiations and was important for the final outcome. Israel had won; the Arab states had lost the war. A large number of Palestinians had fled and had lost their homeland. After the war, Israel was in a much stronger military position than Egypt, and could resume the war if necessary. New empirical evidence shows that this imbalance of power on the ground was strengthened by strong support in Israel's favor from the UN Secretary-General Trygve Lie, as well as from the US administration. Such support served to limit the UN mediator's room for maneuver and ultimately contributed to a biased agreement. An analysis of the negotiations between Israel and Egypt at Rhodes sheds light on and widens our understanding of the approach and power relations which marked the 1949 negotiations. The armistice negotiations represent the first example of a process and an agreement based largely on Israeli premises. Such an agreement could not provide the basis for peace in the Middle East.