The stumbling block, ultimately, was Abu Dhabi’s insistence that Yale offer degree programs at the institute, and Yale’s refusal to grant its degrees in Abu Dhabi.

Yale’s art institute was to be part of Abu Dhabi’s development of Saadiyat Island as a cultural center, including outposts of the Louvre, the Guggenheim and other museums.

“From the beginning, we were clear that degree programs were not what we were talking about,” said Linda K. Lorimer, secretary and vice president of Yale. “We were exploring exciting plans for programs that would be value-added for cultural development. But in the end, they wanted degrees. And at this point in time, we just don’t think we could mount a faculty of the same quality we have here, or attract students of the same caliber.”

The collapse of the talks was first reported in The Yale Daily News on Friday.

Almost every major American research university has recently become intent on globalizing, with many starting branches in the Persian Gulf, while others pursue research partnerships and joint-degree programs around the globe.

But the Ivy League universities – with the exception of Cornell ’s medical school in Qatar – have been notably unwilling to offer their home degrees through overseas programs. Yale, for example, has dozens of foreign programs in China and elsewhere, but none offer Yale degrees.

“It is understandable that some of our elite and most selective universities are not eager to increase significantly the number of degrees they award annually, here or abroad,” said Dr. Edward Guiliano, president of the New York Institute of Technology, which offers its degrees in China, Canada, Jordan, Bahrain and Abu Dhabi. “Selectivity is part of their value equation as well as the pride of their alumni. Plus, of course, it is standard currency with rating and ranking surveys.”

The Abu Dhabi project would have been Yale’s first major venture in the Middle East. Abu Dhabi, the oil-rich capital of the United Arab Emirates, has recently invested heavily in importing educational and cultural institutions from the West. In 2006, the Sorbonne opened a liberal-arts campus in Abu Dhabi. New York University is planning a full-fledged liberal arts campus on Saadiyat Island. And Abu Dhabi paid $520 million for the right to use the Louvre name, part of a deal worth nearly $1.3 billion to create a branch of the Louvre.

Last year, Yale’s president, Richard Levin, told the Yale alumni magazine that he hoped to complete the university’s Abu Dhabi agreement in the summer of 2007. Each of Yale’s arts graduate schools was planning activities – master classes, design workshops and elementary school programs – for the Abu Dhabi institute, all of which were to be paid for by the emirate’s government.

With its Abu Dhabi plans proceeding, New York University earlier this month ended its talks to absorb the American University of Paris.

“As we got closer to the merger, the trade-offs became more apparent,” said John Beckman, a spokesman for N.Y.U. “What we were hearing from the A.U.P. people, consistently, was that they were worried about maintaining the distinctiveness of their identity, and what we were hearing from our students consistently was that they felt the academic experience between the two institutions was incompatible.”