Israel-Palestinian talks end without settlement deal: What happens next?

US Secretary of State Hillary Clinton left the Middle East on Thursday with no sign of a breakthrough in Israeli-Palestinian peace talks, despite three days of intensive mediation. The key sticking point is an unresolved dispute over Israeli settlement expansion in the West Bank.

Only two weeks remain before Israel's settlement freeze expires. With Palestinians threatening to quit the talks if construction resumes, negotiators have a fast-closing window – one filled with a cluster of Jewish holidays – to come up with an end game.

"The clock is ticking,'' says Alon Liel, a former director general of the Israeli foreign ministry. "They will put enormous pressure on Israel for a full freeze, and then say to the Palestinians, if we get you 80 or 90 percent, you don't complain.''

Clinton, Mitchell visit regional leaders

Mrs. Clinton held a one-hour meeting Thursday morning with Palestinian Authority President Mahmoud Abbas at his headquarters here before driving to Jordan for a meeting with King Abdullah.

"I know these are difficult times, circumstances are difficult,'' Mr. Abbas said in a brief remark before the meeting.

US peace envoy George Mitchell traveled to Syria on Thursday to update President Bashar al-Assad on the peace talks. Mr. Liel says he believes the visit was timed as a warning to Abbas that if he decides to abandon the peace talks, the Palestinians will be sidelined in favor of negotiations between Israel and Syria.

The Palestinians refused to drop their threat, saying that Israeli settlement expansion is incompatible with peace talks. Israeli Prime Minister Benjamin Netanyahu insists that the freeze was a temporary confidence-building measure, and that it is politically impossible for him to extend it any longer.

The Americans have taken a middle tack, calling on Israel to extend the freeze while telling the Palestinians it shouldn't be used as an excuse to abandon the talks.

"If the partial freeze is not renewed in some form or fashion, it will be seen by all sides as a major blow to the prestige of the United States,'' says Scott Lasensky, a senior research associate at the United States Institute of Peace, a nonpartisan think tank backed by the government. "Therefore, one challenge for the US is to make sure Israelis see the move as important for their relationship with Washington – not just as a confidence-building measure toward Palestinians.”

US keeps a lid on pessimism, but gaps remain

Until now, the US has shrouded the disputes with upbeat statements on the atmosphere of the talks while demanding that the sides keep the content of the discussions confidential.

"The Americans are keen that the atmosphere seems positive," says Dov Wiessglass, a lawyer who served as a peace process envoy under previous Israeli prime ministers Ariel Sharon and Ehud Olmert. "We know how large the gaps are, so all these nice words will not help.''

With the end of this week's round of summitry, Israel and Palestinian negotiating chiefs will meet in the coming days to prepare a follow-up summit that has yet to be scheduled.