Secretary of State Hillary Clinton said the Obama administration is not ready to throw in the towel on Middle East peace efforts.
"It is time to grapple with the core issues of this conflict: on borders and security, settlements, water and refugees, and on Jerusalem itself," she told the Saban Forum on Middle East Policy Friday night.
But she warned, "In the end, no matter how much the United States and other nations around the region and the world work to see a resolution to this conflict, only the parties themselves will be able to achieve it. The United States and the international community cannot impose a solution. The parties themselves have to want it."
Both sides say they want it, but many question their sincerity.
This past week, the State Department announced it had given up its efforts to get Israel to agree to another freeze of settlement activity in the West Bank.
The Palestinians started collecting letters of recognition from countries willing to support an independent state; Brazil and Argentina were the first to sign up.
Clinton said the Palestinians should forget about achieving independence through the U.N. "Unilateral efforts at the United Nations are not helpful and undermine trust," she said.
She berated Israel for its announcements about new Jewish housing projects in sections of Jerusalem that the Palestinians want to claim as their eventual capital. "Provocative announcements on East Jerusalem are counterproductive," she said.
In his remarks at the Saban Forum, Israeli Defense Minister Ehud Barak said that in order to reach an agreement with the Palestinians, Prime Minister Benjamin Netanyahu should expand his right-leaning government to include not only Barak's Labour Party, but other opposition parties, such as the Kadima Party of former Foreign Minister Tzipi Livni, who was also in the audience Friday night.
Barak sketched out a possible compromise on one of the most sensitive issues, how to divide Jerusalem.
"Western Jerusalem and the Jewish suburbs for us, the heavily populated Arab neighborhoods for them, and an agreed-upon solution in the 'Holy Basin'" which includes areas of historic importance for Jews, Muslims and Christians, Barak offered.
But many question whether Netanyahu could ever support such a compromise with the Palestinians.
Now that direct Israeli-Palestinian talks have collapsed, Clinton said she and Middle East envoy George Mitchell would meet with representatives of both sides in an intensive round of indirect talks aimed at reaching agreement first of all on "a single line drawn on a map that divides Israel from Palestine." Mitchell heads for the Middle East again this week.
Palestinian President Mahmoud Abbas has not yet announced whether he will even take part in such sessions, though Palestinian aides are already involved in the discussions. Abbas is said to be seeking guidance from Arab leaders.
When President Obama opened direct talks in September, he set a goal of a comprehensive settlement within a year. But Clinton made no mention of such a goal in her speech, and she gave few details about the way forward.
There is no shortage of skeptics in the Middle East. "When one way is blocked, we will seek another," Clinton said in her speech. "We will not lose hope, and neither should the people of the region."