After more than two months of pushing Israel to renew a freeze on building in Jewish communities in Judea and Samaria - the West Bank - in order to revive stalled peace talks, Washington has determined that a renewed moratorium would not promote Israeli-Palestinian negotiations.
"After consulting with both sides, we've determined that a moratorium extension won't at this time provide the best basis for resuming direct negotiations," a spokesman for the U.S. Embassy Tel Aviv told CBN News.
The spokesman, who asked not to be identified, said the U.S. would still be engaging with both sides to see the best way for getting back to the negotiating table. He said the U.S. remained engaged toward the goal of a two-state solution for the Israeli-Palestinian conflict.
CBN News Jerusalem Correspondent Julie Stahl talked more about the Obama administration's decision on CBN News ChannelMorning News, Dec. 8. Click play to watch.
Reports in major Israeli papers on Wednesday quoted two unnamed U.S. officials, saying the push for a moratorium was off but that talks would continue.
"In the coming days and weeks we will engage with both sides on the core substantive issues as well as with Arab states and other international partners with the goal of working toward a framework on all permanent status issues," one official was quoted as saying. They may revert to what was called "proximity talks" where the U.S. acts as a mediator in order to push the process forward, reports said.
Israel froze all new construction in settlements in Judea and Samaria for 10 months starting late last year in a bid to coax Palestinians back into direct negotiations. Direct talks between the parties restarted but only about a month before the moratorium was due to expire. When it did, on September 26, the newly revived talks sputtered and stalled.
Since then, the U.S. has been pushing Israeli Prime Minister Benjamin Netanyahu to reinstate the settlement freeze and even offered him a deal with huge diplomatic and security perks during a trip to the U.S. But that deal was blocked when Netanyahu sought approval from his cabinet, which wanted the U.S. to confirm its offers in writing. No such confirmation was forthcoming.
Netanyahu's office declined to give a direct response to the reports that the push for a settlement freeze was over but said Israel still wants to achieve peace.
"Israel remains determined to continue the efforts to achieve a historic peace agreement with the Palestinians, an agreement that will bring about genuine reconciliation between the two peoples," Netanyahu's spokesman Mark Regev said in a prepared statement.
"We believe that it is indeed possible to see the Palestinians achieve sovereignty while protecting Israel's most vital national and security interests," Regev said.
The Palestinians were reportedly furious over the U.S. announcement and threatened to turn to the United Nations for help instead.
"It's unclear how the United States plans to succeed where it has so far failed, and it has failed mainly because of the Israeli policy," Secretary-General of the Palestine Liberation Organization's Executive Committee Yasser Abed Rabbo was quoted as saying on the Israeli Web site YNet.
Abed Rabbo said the Obama administration was only giving Israel "an opportunity to waste more time" and therefore the Palestinians must "turn to the broader framework of the international community" referring the U.N. General Assembly and Security Council.
The Palestinians have been threatening to call for a unilateral recognition of a state of Palestine within the West Bank and Gaza Strip according to the lines that were in place before the 1967 Six-Day War.
Brazil and Argentina unilaterally recognized a Palestinian state as such during the last week and Uruguay pledged to do the same soon. The move angered both the U.S. and Israel.
The Israeli daily Ha'aretz quoted Israeli Defense Minister Ehud Barak as saying the U.S. had stopped talks with Israel about the West Bank settlement freeze and the resumption of peace talks because it was distracted by WikiLeaks revelations and tensions between North and South Korea.
But U.S. State Department spokesman P.J. Crowley suggested it was Israel that had been preoccupied with putting out the largest fire in its history.
Meanwhile, Secretary of State Hillary Clinton is expected to present Washington's plan for Israeli-Palestinian relations during an address at the Saban Forum in Washington on Friday, the Jerusalem Post reported.