WASHINGTON—From the start of his term, President Barack Obama was determined to defy the cynics and doubters and push for peace in the Middle East.
But by Tuesday, the White House's efforts to broker a deal in the decades-old dispute between Israelis and Palestinians had faltered -- demonstrating once again why it is one of the world's most intractable conflicts.
After months of grueling diplomacy, using a mixture of pressure and promises, the White House abandoned attempts to persuade Israel to slow West Bank settlement activity.
The Palestinians had demanded the freeze in exchange for engaging in direct talks that were supposed to lead to a Palestinian state living side-by-side in peace with Israel. That deal, it was hoped, would lead to a broader Middle East peace accord.
Two American officials said the administration has concluded that the strategy of seeking a freeze wasn't working, while insisting the administration was not back at square one.
But the talks stalled in September, barely a month after they started. The Palestinians refused to return to direct negotiations until a new freeze was in place following the expiration of an earlier, 10-month Israeli slowdown in settlement expansion.
Now, said the U.S. officials, American pressure for a three-month moratorium and the U.S. incentives package, which included political, diplomatic and security assurances for Israel, are off the table. They spoke on condition of anonymity because they were not authorized to speak publicly on the matter.
Obama's ambitious bid to succeed in the Middle East where other presidents had failed was always a gamble.
But the effort's apparent breakdown comes at a time when the administration is struggling on a number of other fronts abroad. There is slow progress in the Afghanistan war, increasing friction with China and the embarrassing deluge of confidential diplomatic cables released by the website WikiLeaks.
The U.S. officials said the administration was not giving up efforts to broker a peace deal and noted that Israeli and Palestinian negotiators will visit Washington next week for consultations.
The U.S. will be talking with both sides in the coming days, one of the officials said, while Arab states and other interested countries also will be consulted.
However, the administration's decision to drop support for the Palestinians' key demand could mean the end of the moribund peace process.
Obama had made Israeli-Palestinian peace a major goal of his administration, appointing seasoned peace negotiator George Mitchell as his special Mideast envoy on his second day in office.
Mitchell made dozens of trips to the region to get the parties to agree to direct talks. In early September, with the expiration of the initial slowdown looming, Obama brought Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas along with the leaders of Jordan and Egypt to launch the face-to-face discussions, which failed.
Neither Israeli nor Palestinian officials would comment on the developments in Washington before their official announcement.
Earlier Tuesday, Israeli Defense Minister Ehud Barak said the U.S. had halted talks with Israel on settlement activity because Washington was distracted by the WikiLeaks release of secret documents.
State Department spokesman P.J. Crowley responded that Israel may have been preoccupied with putting out a huge forest fire that burned until Sunday.
The U.S. had been pressing Israel to renew a moratorium on new settlement construction in exchange for security guarantees and diplomatic assurances of support. Israel wanted those in writing, as well as a pledge that east Jerusalem would be exempt from the moratorium.
The Palestinians refused to return to the peace talks unless Israel halted all building in the West Bank and east Jerusalem -- lands they want for part of their future state.
Peace talks began in September but ground to a halt three weeks later after Israel's original moratorium on new West Bank construction expired.
Netanyahu returned from a November trip to the U.S. with a list of guarantees, including 20 next-generation stealth fighter planes and U.S. pledges to veto anti-Israel resolutions at the United Nations, according to Israeli officials.
In exchange, Israel was asked to renew the expired limits on settlement construction.
Days later, the deal snagged after members of Netanyahu's Cabinet demanded a written pledge from the U.S. that the moratorium would exclude east Jerusalem. Such a pledge never materialized.
The U.S. had wanted a moratorium in the hopes that it would allow Israel and the Palestinians to make enough progress in drawing their future borders to make the settlement question irrelevant.
With borders determined, Israel could resume building on any territories it would expect to keep under a final peace deal.
But Israeli officials said Tuesday that short of an understanding on borders, a crisis could erupt if Israel agreed to the freeze sought by the U.S.
Now, said Israeli officials, insisting on anonymity because of the sensitivity of the contacts, the U.S. and Israel have agreed on a statement that "in the coming days and weeks, efforts will continue toward finding ways to renew the direct negotiations in order to reach a framework that would lead in the end to an agreement between the two sides."
Yasser Abed Rabbo, secretary general of the PLO, blamed Israel for the impasse.
"It is clear that the failure of the American efforts is entirely a result of the obstacles and conditions placed by Mr. Netanyahu," Rabbo said. He said the Palestinians would have to consult with their Arab allies on their next move.
Associated Press writers Tia Goldenberg in Jerusalem and Karin Laub in Ramallah, West Bank, contributed to this report.