With the negotiations deadlocked over the issue of Jewish settlements, several veterans of Middle East peacemaking said Mr. Obama's warning had come true — only weeks after Prime Minister Benjamin Netanyahu and the Palestinian president, Mahmoud Abbas, agreed to sit down.

Not only is the Obama administration holding hands, they said, it is also handing out concessions to each side, in a bid to keep Mr. Netanyahu and Mr. Abbas at the table. The generosity of the American offers, and the reluctance of the Israelis or the Palestinians to accept them, have been telling.

On Tuesday, Mr. Netanyahu's senior cabinet ministers convened in Jerusalem, officials said, and did not even take up a package of security guarantees being offered by the United States in return for Israel's extending a freeze on the construction of settlements in the West Bank by 60 days.

The Palestinians, meanwhile, rejected a proposal by the administration that they keep negotiating without an extension, in return for an American endorsement of their position on the borders of a future Palestinian state. Without an extension, the Palestinians insist, the talks are dead.

Few analysts argue that Mr. Obama can broker a peace agreement without horse-trading on issues like this. Ultimately, most believe, he will have to put down his own blueprint for a deal. The question some are asking is whether he is risking too much too soon — and for too little.

"I never imagined that we would have to do anything else," said Martin S. Indyk, a former American ambassador to Israel and a negotiator in the Clinton administration. "But in the process, we have to be careful not to pay with strategic coin for mere tactical breathing room."

In the case of Israel, officials said, the United States is offering military hardware, support for a long-term Israeli presence in the Jordan Valley, help with enforcing a ban on the smuggling of weapons through a Palestinian state, a promise to veto Security Council resolutions critical of Israel during the talks and a pledge to forge a regional security agreement for the Middle East.

For all this, people briefed on the details said, the United States is seeking a single 60-day, nonrenewable extension.

"It's an extraordinary package for essentially nothing," said Daniel C. Kurtzer, who also served as American ambassador to Israel and was a negotiator in the Clinton administration. "Given what's already happened, who thinks that a two-month extension is enough?"

After initially turning down the American offer, Mr. Netanyahu now appears inclined to accept it, several officials said. They said he needed extra time to round up the necessary votes among his cabinet members, several of whom are steadfastly opposed to an extension of the freeze.

But even if he signs on, some analysts predict that the two sides will end up in the same cul-de-sac in two months. Mr. Abbas, several people said, has told associates that he feels that he has no choice but to keep pushing for a freeze, largely because the Obama administration made settlements the centerpiece of its first 10 months of Middle East diplomacy.

For now, at least, that imperative has trumped even an offer by the United States to formally endorse a Palestinian state based on the borders of Israel before the 1967 Middle East war, something for which the Palestinians have long pushed. Some Palestinians say that an American endorsement is not worth a great deal if the Israelis refuse to recognize it.

"The original sin was putting so much emphasis on settlements, an issue we couldn't resolve," said Robert Malley, the Middle East and North Africa program director for the International Crisis Group. "We've spent the last year trying to undo the damage of that step."

Some analysts argue that the United States still has one crucial advantage. Neither side wants to alienate Washington - the Israelis, because they need American help in defending themselves against Iran; the Palestinians, because they want backing on the issue of territory. In fact, lobbying the administration might be a higher priority than getting back to the bargaining table.

"There is a desire by both parties to woo the party that is not in the room," said David Makovsky, an analyst at the Washington Institute for Near East Policy. "Both want to get the support of the U.S."

The political calendar might also be driving the administration to muddle through this period, analysts said.

"If we can get these 60 days, and get past the midterm elections, we can create a moment of choice for both sides," said Daniel Levy, a former negotiator who is now at the New America Foundation.

The question of how much the United States is offering, and what it is asking for in return, is being fiercely debated within the White House and the State Department, according to officials. Some of that reflects the strong personalities of the people formulating Middle East policy in the administration.

The package of incentives for Israel was devised largely by Dennis B. Ross, a senior adviser on the Middle East at the National Security Council and a veteran peace negotiator. But the day-to-day negotiations are being handled by George J. Mitchell, the administration's special envoy to the region who led the push on Israel to halt settlement construction.

The administration hopes that by making it clear that any settlement extension would be a one-time-only offer, it can avoid the prospect of the Palestinians' threatening to walk out again in two months.

"We recognize that to get the parties over this hump we have to offer something of value to each side," said the State Department spokesman, Philip J. Crowley. "In return, we need a commitment from the parties to remain in the negotiations long enough to reach an agreement. We don't want to go through this again."