This paper introduces a distributed haptic control architecture that can render direct interaction between users in addition to cooperative manipulation of virtual objects. The proposed architecture integrates remote dynamic proxies and peer-to-peer wave-based communications. Remote dynamic proxies are avatars of users at peer sites with motion governed by second order dynamics laws. They render physically-based motion of the distant users in the presence of update discontinuities caused by packet transmission limitations. They also enable users to touch their far away peers directly. The remote dynamic proxies are integrated with wave-based communications via a simplified symmetric algorithm for computing the transformation between wave variables and standard power variables. This algorithm implements peer-to-peer communications through input and output waves rather than master-slave communications through forward moving and returning waves. Wave variable controllers using this algo...