Peace talks between Israelis and Palestinians are in danger of unraveling unless Prime Minister Benjamin Netanyahu of Israel and the Palestinian president, Mahmoud Abbas, show more political courage and sense.

Even jaded Middle East experts thought these negotiations had a real chance. But then Israel’s 10-month moratorium on building settlements in the West Bank expired. Mr. Netanyahu insisted that Israeli politics wouldn’t tolerate an extension. Mr. Abbas, who had been promised a permanent freeze by the White House, said that he couldn’t keep compromising. And that’s where the two stand today.

The Obama administration has made a very generous offer to Israel that should give Mr. Netanyahu more than enough cover to prolong the moratorium and keep the talks going. In exchange for a modest 60-day extension, the administration is promising Israel increased military aid — fighter planes, missile defense, satellites — and other security guarantees. It has also promised not to ask for further extensions and to veto any United Nations Security Council resolutions on Arab-Israeli issues during the one-year negotiating period.

That package is, if anything, overly generous. Israel will surely be looking for more sweeteners as part of a final peace deal. We can’t understand why Mr. Netanyahu hasn’t grabbed it.

We’re not clear on what the Obama administration is offering the Palestinians to get them to stay at the table. Washington needs to be very generous.

Sixty days is too short. But it still might be enough if the two sides — and the Americans — use the time to negotiate the borders of the new Palestinian state. (Those maps, give or take a little, were drawn up years ago.) Once borders are set, Palestinians could have more confidence that their long-promised state will become a reality. Israelis would know which settlements will become part of Israel in the land swaps that must be part of any agreement and could then resume building there.

When the Arab League meets on Friday, Arab states — especially Saudi Arabia and the United Arab Emirates — that have long espoused the Palestinian cause need to encourage Mr. Abbas to accept any reasonable American offer and resume negotiations.

These states also need to vastly increase financial aid to the Palestinian Authority. And they need to prove that they are willing to normalize relations with Israel as part of a peace deal.

If Israelis and Arabs cannot find a way to get beyond what is essentially a tactical problem, how will they ever be able to reach an actual peace agreement?