Jerusalem (CNN) -- A Jewish settlers group in the West Bank hailed Wednesday the Obama administration's decision to give up on efforts to stop pushing for a freeze on settlement construction.
But a Palestinian negotiator says the peace process is failing because of Israel's stance.
"This is the prudent and necessary move and displays that the true interests of the Israeli people are not being abandoned in the face of unjustified international demands," Danny Dayan, chairman of the Yesha Council of Jewish Communities in Judea and Samaria, said in a statement.
"Israel came to the negotiating table without any preconditions. When the Obama administration proposed this precondition it cast serious doubts over their ability to be an honest broker in the process and the removal of this precondition is therefore a very positive development."
Mohamad Shtayeh, member of the Palestinian negotiating team, said Israel's daily settlement activity is sabotaging the peace process, he said.
He said Palestinian President Mahmoud Abbas is on his way to Jordan and Egypt for consultations with leaders and then the Palestinian leadership will eventually meet in Ramallah to decide how to proceed.
A State Department official said Tuesday United States has abandoned efforts to persuade Israel to renew the freeze as a precondition for jump-starting Israeli-Palestinian peace talks.
U.S.-Israeli talks over a possible settlement freeze have ended after what the official, who spoke on condition of anonymity because of the sensitivity of the diplomacy, called a "joint determination."
A previous Israeli moratorium on new settlements in the occupied West Bank expired in September, and Palestinians have refused to return to stalled talks unless new construction stops.
Washington will continue to work with both sides on core issues, with Palestinian negotiators set to visit Washington next week, the official said. But the United States and Israel "have determined a moratorium extension at this time will not provide the best basis for direct negotiations," the official added.
Shtayeh warned last week that an Israeli plan to build more than 600 new housing units in East Jerusalem could be the "last nail in the coffin of the peace process."
Dayan said that the development represents a good time to rethink the principles behind the peace process over the years. He said that over the last 18 years, "little to nothing has been achieved in truly bringing the parties closer together and the "situation therefore demands a change of direction."
"Now is the time for the international community to finally recognize that peace will never be achieved by conceding Israeli territory to an entity that will threaten our very existence," he said.
"The process, when based on these misplaced understandings, routinely proved futile and resulted in only frustration and violence. We firmly believe that peaceful coexistence with the Palestinians is possible if we think creatively, proactively and focus on what unites us rather than what divides us."
Shtayeh, meanwhile, said Palestinian options are open. They include pursuing a solution from the Untied Nations and have independent countries recognize an independent Palestinian state based on the borders before the 1967 war.