  A recently proposed configuration-interaction based impurity solver is used
in combination with the single-site and four-site cluster dynamical mean field
approximations to investigate the three-band copper oxide model believed to
describe the electronic structure of high transition temperature copper-oxide
superconductors. Use of the configuration interaction solver enables
verification of the convergence of results with respect to the number of bath
orbitals. The spatial correlations included in the cluster approximation
substantially shift the metal-insulator phase boundary relative to the
prediction of the single-site approximation and increase the predicted energy
gap of the insulating phase by about 1 eV above the single-site result. Vertex
corrections occurring in the four-site approximation act to dramatically
increase the value of the optical conductivity near the gap edge, resulting in
a better agreement with the data. The calculations reveal two distinct
correlated insulating states: the `magnetically correlated insulator', in which
nontrivial intersite correlations play an essential role in stabilizing the
insulating state, and the strongly correlated insulator, in which local physics
suffices. Comparison of the calculations to the data place the cuprates in the
magnetically correlated Mott insulator regime.
