Barack Obama failed to achieve a hoped-for breakthrough aimed at the resumption of Middle East negotiations yesterday ­during a three-way meeting with the Israeli and Palestinian leaders in New York.

The president had only one success to show for months of effort: a tentative handshake between the Israeli prime minister, Binyamin Netanyahu, and the Palestinian president, Mahmoud Abbas, who met for the first time since the Israeli leader took office in March.

The two appeared reluctant to shake hands, smiling hesitantly and having to be coaxed by Obama.

A final burst of White House activity over the preceding 24 hours failed to close the diplomatic gap between Abbas and Netanyahu. The Israeli prime minister rebuffed a US call for a total freeze on ­Jewish settlement on the West Bank. Abbas refused to resume negotiations without such a freeze.

Each blamed the other for the stalled Obama peace initiative.

America's frustration showed when Obama told reporters the two sides had to stop stalling. "Permanent status negotiations must begin and begin soon. It is past time to talk about starting negotiations. It is time to move forward," he said.

The US negotiator, George Mitchell, who spent a fruitless week in the Middle East last week shuttling between the Israeli and Palestinian sides, is to return next week to the region for further talks. Obama said he had asked the secretary of state, Hillary Clinton, to report back on progress in the middle of next month.

The failure to have anything significant to announce was a setback for Obama, who hoped for a diplomatic triumph after weeks on the defensive on domestic ­policy. But it represented a success, at least in the short term, for Netanyahu, who had been resisting US efforts for a ­settlement freeze.

Having succeeded in publicly snubbing pleas from Obama, Netanyahu was in a magnanimous, albeit slightly patronising mood at a press conference afterwards, saying: "The importance of the meeting was actually its existence."

Referring to Obama's plea for urgency, Netanyahu, said: "There was general agreement, including on the part of the Palestinians, that the peace process has to be resumed as soon as possible with no preconditions."

Israel's foreign minister, Avigdor Lieberman, who sat in on the talks, was more combative, saying the Israeli government had been ready to sit down but the Palestinians had demanded all sorts of preconditions.

The failure of the summit was as big a setback for Abbas as it was for Obama. Abbas had been reluctant even to attend the tripartite talks without a settlement freeze. His advisers made clear that the New York encounter was a meeting, no more, an act of deference to a US president who aroused such high hopes. By attending, Abbas opens himself to attack from opponents such as Hamas, who have already criticised him for taking part in a photo opportunity without receiving anything in return.

Speaking after yesterday's talks the ­Palestinian president said Israel must honour agreements on borders and the future of Jerusalem, which he said its government made in 2008 talks with the Palestinians, if stalled peace negotiations were to resume. He also repeated Palestinian insistence that Israel halt settlement building in the occupied territories, including East Jerusalem.

He had put these points to Obama. "We believe the American administration will review the positions of the two sides in the coming weeks to make it possible for us to renew peace talks based on our stated position," Abbas said.

Although Obama emphasised yesterday that he was in for the long haul, it was an inauspicious start, failing to secure even a confidence-building deal that would open the way for the resumption of negotiations. Obama said that since his administration took office in January there had been progress toward laying a foundation for the resumption of peace talks "but we still have much further to go". He called on the two sides to show "the flexibility, common sense and compromise which is necessary to achieve our goals".

The meagre results made for a gloomy comparison with the excitement of Obama's election and then his long-­heralded speech in Cairo last June; its messages to the Muslim world insisted that Israeli settlements must stop.
Netanyahu has refused to give enough ground on a settlement freeze to allow Mitchell to play a genuine bridging role. Talk about "natural growth" of the settlements may play well with the Likud leader's supporters and partners at home. On the diplomatic front it spells impasse.

Abbas has learned the lesson of negotiations that go nowhere slowly. Even if the economy of the West Bank is improving and some Israeli roadblocks have been removed, an "economic peace" that does not end the occupation will not do. Hamas in the Gaza Strip, still in place despite the winter war, opposes talks.

The question for Obama is how long he can go on without something tangible.