Some analysts suggested that the U.S. could try to lure Abbas to talks by persuading Israel to agree to a partial settlement freeze, release Palestinian prisoners or hand more West Bank land to Palestinian control.
But it's unclear if Israel would be willing to make such gestures, which have been proposed in the past, and if Abbas would consider them sufficient.
Much of Obama's visit appeared to be aimed at building credibility with ordinary Israelis and convincing them that a deal with the Palestinians is in their interest and still possible, at times bypassing Netanyahu and his political allies.
Speaking to Israeli students Thursday, Obama urged them to imagine themselves in the place of Palestinians and outlined some of the daily hardships of living under Israeli occupation.
"Israelis must recognize that continued settlement activity is counterproductive to the cause of peace, and that an independent Palestine must be viable, that real borders will have to be drawn," he said. "I've suggested principles on territory and security that I believe can be the basis for talks."
But some warned that time is running out for a deal as settlements continue to grow.
"We are reaching the tipping point," said settlement watcher and Jerusalem expert Daniel Seidemann, an Israeli lawyer.
"A year from now, if the current trends continue, the two-state solution will not be possible. The map will be so balkanized that it will not be possible to create a credible border between Israel and Palestine," he said.
Palestinians also argue that after two decades of intermittent negotiations, the contours of an agreement have widely been established and it's time for decisions, not endless rounds of diplomacy. They suspect Netanyahu is seeking open-ended negotiations to give him diplomatic cover for more settlement-building, while being unwilling to make the needed concessions.
Netanyahu has said he is willing to negotiate the terms of a Palestinian state. He reiterated Wednesday, with Obama by his side, that he is ready to return to talks but also said there should be no "preconditions" — his term for the Palestinians' insistence on a settlement freeze.
The Israeli prime minister has also adopted a tougher starting position for negotiations than some of his predecessors. He refuses to accept the 1967 frontier as a baseline for border talks — even though two previous Israeli leaders, Ehud Barak and Ehud Olmert, did offer the Palestinians the overwhelming majority of the West Bank in previous rounds.
Netanyahu also says he will not relinquish any of east Jerusalem, an area Israel expanded into the adjacent West Bank and annexed immediately after the 1967 war.
Israeli governments have built many thousands of homes for Jews in east Jerusalem since then, creating a ring of Jewish settlement within the city's municipal boundaries that increasingly disconnects its Arab-populated core from the rest of the West Bank. Some 200,000 Jews now live in east Jerusalem, almost even with the Palestinian population in the city, which overall has about 800,000 residents.
In recent months, Netanyahu's government has approved construction plans for thousands more settlement apartments on Jerusalem's southern edge that would further isolate Arab neighborhoods in the city from the West Bank, including the nearby biblical city of Bethlehem.
There is strong consensus on the Palestinian side that a two-state deal must include a sharing of Jerusalem — resulting in total deadlock on this issue.
European diplomats warned in an internal report last month that if the current pace of settlement activity on Jerusalem's southern flank continues, "an effective buffer between east Jerusalem and Bethlehem may be in place by the end of 2013, thus making the realization of a viable two-state solution inordinately more difficult, if not impossible."
Henry Siegman, a leading critic of Israeli policy in the American Jewish community, said he believes Obama is fully aware of the corrosive effect of settlements.
Time for a deal is slipping away and Obama cannot make do with four more years of just managing the conflict, he said.
"They (U.S. officials) know that if they do nothing, they are sealing the doom of the two-state solution if it has not already been sealed," said Siegman. "It cannot survive another four years, given the rate of colonization that is taking place."
Laub is the AP chief correspondent in the Palestinian territories. She has covered the Israeli-Palestinian conflict since 1987. Daraghmeh has covered the West Bank for the AP since 1996.
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