The Hubbard-Holstein model is one of the simplest to incorporate both electron-electron and electronphonon interactions. In one dimension at half filling, the Holstein electron-phonon coupling promotes on-site pairs of electrons and a Peierls charge-density wave, while the Hubbard on-site Coulomb repulsion U promotes antiferromagnetic correlations and a Mott insulating state. Recent numerical studies have found a possible third intermediate phase between Peierls and Mott states. From direct calculations of charge and spin susceptibilities, we show that ͑i͒ as the electron-phonon coupling is increased, first a spin gap opens, followed by the Peierls transition. Between these two transitions, the metallic intermediate phase has a spin gap, no charge gap, and properties similar to the negative-U Hubbard model.