Binyamin Netanyahu, whom the administration once would have been happy to see undermined, has been strengthened — while Palestinian Authority President Mahmoud Abbas, whom the administration had hoped to bolster, has been weakened. ”There was an excess of zeal at first,” said Edward S. Walker Jr., who was assistant secretary of state for Near Eastern affairs in the Clinton administration. “ It is a noble endeavor to try to hammer out peace.  But you have to look at the relationships.  You have to read the players.  They got out in front of studying the problem and were anxious to show progress. ”Daniel Levy, a veteran Israeli peace negotiator now at the Century Foundation in Washington, summed up the administration’s efforts in recent days as “amateur night at the Apollo Theater.”  He said the administration did not game out the consequences of its demands on the parties — and then flinched. “ They just dug deeper and deeper their own grave,” he said. “ All of this talk of negotiations doesn’t cut the mustard in the region.” 

U.S. officials say that in the wake of the war in the Gaza Strip in the winter, they wanted to send a signal of toughness and push both sides to take positive steps to build an atmosphere for talks.  By that measure, there has been some progress: Israelis and Palestinians have been deep in conversations trying to set the parameters for negotiations. 

Administration officials dispute that critique, saying the Israeli offer actually holds the key to a real settlement freeze.  If negotiations progress, Israel would come under fierce pressure not to lift the moratorium after it ends in nine to 12 months.  So, once the grandfathered units have been completed, officials said, construction would end — and a real settlement freeze would be in place.