We were thrilled when President Obama decided to plunge fully into the Middle East peace effort. He appointed a skilled special envoy, George Mitchell, and demanded that Israel freeze settlements, Palestinians crack down on anti-Israel violence and Arab leaders demonstrate their readiness to reach out to Israel.

The Israelis have refused to stop all building. The Palestinians say that they won’t talk to the Israelis until they do, and President Mahmoud Abbas is so despondent he has threatened to quit. Arab states are refusing to do anything.

Mr. Obama’s own credibility is so diminished (his approval rating in Israel is 4 percent) that serious negotiations may be farther off than ever.

Peacemaking takes strategic skill. But we see no sign that President Obama and Mr. Mitchell were thinking more than one move down the board. The president went public with his demand for a full freeze on settlements before securing Israel’s commitment. And he and his aides apparently had no plan for what they would do if Prime Minister Benjamin Netanyahu said no.

Most important, they allowed the controversy to obscure the real goal: nudging Israel and the Palestinians into peace talks. (We don’t know exactly what happened but we are told that Mr. Obama relied more on the judgment of his political advisers — specifically his chief of staff, Rahm Emanuel — than of his Mideast specialists.)

The idea made sense: have each side do something tangible to prove it was serious about peace and then start negotiations. But when Mr. Netanyahu refused the total freeze, President Obama backed down.

Mr. Netanyahu has since offered a compromise 10-month freeze that exempts Jerusalem, schools and synagogues and permits Israel to complete 3,000 housing units already under construction. The irony is that while this offer goes beyond what past Israeli governments accepted, Mr. Obama had called for more. And the Palestinians promptly rejected the compromise.

Washington isn’t the only one to blow it. After pushing President Obama to lead the peace effort, Arab states, especially Saudi Arabia, refused to make any concessions until settlements were halted. Mr. Mitchell was asking them to allow Israel to fly commercial planes through Arab airspace or open a trade office. They have also done far too little to strengthen Mr. Abbas, who is a weak leader but is still the best hope for negotiating a peace deal. Ditto for Washington and Israel.

All this raises two questions: What has President Obama learned from the experience so he can improve his diplomatic performance generally? And does he plan to revive the peace talks?

The president has no choice but to keep trying. At some point extremists will try to provoke another war. and the absence of a dialogue will only make things worse. Advancing his own final-status plan for a two-state solution is one high-risk way forward that we think is worth the gamble. Stalemate is unsustainable.