This scene is good example of the "repeated viewing analysis" syndrome. We really have to throw out the book scenario of the third man. It would have added clutter to the scene. But think of viewing the scene for the first time. This scene has an enormous amount of dramatic build-up and consequence.

Michael is making his leap into family business. A very personal struggle and decision that will be consumated by his act of violence. As the viewer we feel Michael's anxiety. Play that against Sollozzo's desparation and suspicion. Will Michael be able to do it? Will Sollozzo foil the attempt? Sollozzo frisks him going into the bathroom (thank God we sigh, I hope he doesn't do it on the way out). Then Michael comes out of the bathroom, AND HE DOESN'T COME OUT BLASTIN'!!. Omigod what if Sollozzo frisks him again!!!? Coppala builds up the suspense through, sound, sight and dialog AND the actors play beautifully against each other.

Without a doubt one of the most dramatic and perfectly executed scenes in movie history.