Palestinian President Mahmoud Abbas said, Thursday, that he will not seek re-election-- a sign that the Obama administration's Middle East peace efforts could be breaking down.

It is not clear whether Abbas will actually make good on his threat not to seek another term of office in January. He made that threat previously, then recanted after President Obama called him and promised to put more heat on Israel.

The Palestinians are upset Obama and Secretary of State Hillary Clinton have not been able to force Israel to stop building settlements in the West Bank.

There are about 500,000 Israelis living on land the Palestinians want as a future state.

Meanwhile in Egypt, Clinton defended the U.S. stance toward Israeli settlement building, insisting that Washington does not accept their legitimacy and wants to see construction halted "forever."

Clinton has had a lot of explaining to do after Saturday when, alongside Israeli Prime Minister Benjamin Netanyahu in Jerusalem, she praised his offer to limit settlement construction without actually stopping it.

The announcement by Abbas that he is quitting could be an indication of the lack of confidence the Palestinians have in the White House's ability to actually broker the kind of peace settlement they want.