  We analyze the reaction dynamics of central Pb+Pb collisions at 160
GeV/nucleon. First we estimate the energy density pile-up at mid-rapidity and
calculate its excitation function: The energy density is decomposed into
hadronic and partonic contributions. A detailed analysis of the collision
dynamics in the framework of a microscopic transport model shows the importance
of partonic degrees of freedom and rescattering of leading (di)quarks in the
early phase of the reaction for E > 30 GeV/nucleon. The energy density reaches
up to 4 GeV/fm^3, 95% of which are contained in partonic degrees of freedom. It
is shown that cells of hadronic matter, after the early reaction phase, can be
viewed as nearly chemically equilibrated. This matter never exceeds energy
densities of 0.4 GeV/fm^3, i.e. a density above which the notion of separated
hadrons loses its meaning. The final reaction stage is analyzed in terms of
hadron ratios, freeze-out distributions and a source analysis for final state
pions.
