Washington's deadline for reaching a peace deal expired yesterday with the sides bitterly divided and warnings that Israel risked becoming an "apartheid state" if it failed to make peace with the Palestinians.
As final date for the nine-month negotiation period arrived, peace hopes appeared more remote than ever with Israeli Prime Minister Benjamin Netanyahu and Palestinian president Mahmud Abbas locked in a tactical game of fingerpointing, and US attempts to broker an extension in tatters.
After more than a year of intensive shuttle diplomacy by US Secretary of State John Kerry who had initially hoped for a deal by April 29, Washington's was reluctant to admit failure, acknowledging only a "pause" in the dialogue.
But Israel and the Palestinians were under no illusions about the fate of the latest US-led peace effort, with analysts saying it was a case of back to square one.
Israeli analysts said the collapse of the talks was a direct result of Israel's relentless settlement construction on land which was the subject of negotiations.
Figures published yesterday by settlement watchdog Peace Now showed that in parallel with the negotiations, the Israeli government approved plans for nearly 14,000 new settler homes, describing it as an "unprecedented number".
Kerry has found himself at the centre of a political storm after reportedly saying that if Israel didn't seize the opportunity to make peace soon, it risked becoming an "apartheid state" with second-class citizens.
"Apartheid" refers to South Africa's 1948-1994 oppressive and racially segregated social system.
In his apology, Kerry insisted that he had never called Israel "an apartheid state" but he did not deny using the term, suggesting only that he used a poor choice of words.