After three weeks of fruitless haggling with Prime Minister Benjamin Netanyahu, the Obama administration has given up its effort to persuade the Israeli government to freeze construction of Jewish settlements for 90 days, a senior administration official said Tuesday.

The decision leaves Middle East peace talks in flux, with the Palestinians refusing to resume direct negotiations absent a moratorium, and the United States struggling to find another formula to bring them back to the table. It is another setback in what has proved to be a star-crossed campaign by President Obama.

The administration decided to pull the plug, officials said, because it concluded that even if Mr. Netanyahu persuaded his cabinet to accept a freeze — which he had not yet been able to do — the 90-day negotiating period would not have produced the progress on core issues that the United States originally had sought.

“We made a strong effort, and everyone tried in good faith to resume direct negotiations in a way that would be meaningful and sustainable,” said a senior American official, speaking on the condition of anonymity to discuss the administration’s internal deliberations, which are continuing. “But the extension wasn’t actually going to do that.”

Administration officials did not offer a Plan B to revive the talks, and analysts said it was not clear that the administration had one, beyond a general commitment to keep talking to the Israelis and Palestinians about the major issues that divide them: borders, security and the status of Jerusalem, among others.

A preview of the administration’s next move could come in an address on Middle East policy that Secretary of State Hillary Rodham Clinton is scheduled to deliver on Friday at the Brookings Institution. But the administration’s strategy appeared to be unsettled.

“Wisely, in my view, the administration is bending to reality,” said Robert Malley, a peace negotiator in the Clinton administration. “The most likely scenario is that this moratorium was going to buy them a short reprieve, and was then going to plunge them into the same crisis they were in before.”

Neither the Israelis nor the Palestinians issued a response to the news. But administration officials said the United States made the decision after consultations between Mrs. Clinton and Mr. Netanyahu. The two had hammered out the agreement on a 90-day freeze, which Mr. Netanyahu later said he could not sell to his cabinet without written security assurances from the Americans.

Those assurances, which included 20 F-35 stealth airplanes and an American pledge to veto anti-Israel resolutions at the United Nations, were never delivered to the Israelis. While that package is now off the table, an official said, he reiterated that the United States would continue to protect Israel’s security and fight efforts to challenge its legitimacy in international organizations.

In the short run, analysts said the failure raised questions about Mr. Netanyahu’s capacity to negotiate a final deal.

“It revealed a degree of weakness in his coalition,” said Daniel C. Kurtzer, a former American ambassador to Israel. “This was such an attractive deal for him, but he still couldn’t get his cabinet to buy into it without attaching conditions to it that were unacceptable to Washington.”

But the Palestinians also shifted their position, insisting that a settlement freeze must include East Jerusalem as well as the West Bank. Israel’s initial 10-month moratorium included only the West Bank. The United States never asked Mr. Netanyahu to expand it to Jerusalem, and analysts said Mr. Netanyahu would never have been able to persuade his right-wing cabinet to go along with it.

There were also deeply divergent views about what the two sides would discuss during the 90 days, officials said. The Palestinians wanted the talks to focus tightly on the borders of a future Palestinian state. Mr. Netanyahu resisted that, saying the two sides must discuss the full gamut of issues rather than just borders.

Mr. Obama began direct negotiations with great hoopla in early September, but the talks ground to a halt within weeks over the issue of settlements. After meeting three times in that month, Mr. Netanyahu and the Palestinian Authority president, Mahmoud Abbas, have not sat down since then.

Earlier on Tuesday, Israel’s defense minister, Ehud Barak, suggested that the United States was halting its effort because it was preoccupied with the fallout from leaks of confidential diplomatic cables. Administration officials flatly denied that.

The paralysis in the peace process comes against the backdrop of a new challenge to Israel. The Israeli government expressed disappointment and annoyance over a declaration by Argentina that it had decided to “recognize Palestine as a free and independent state” based on the 1967 boundaries.

Argentina announced that it was following Brazil and Uruguay in recognizing a Palestinian state, saying that the move came in response to a request made by Mr. Abbas in Argentina last year.

The Israeli Foreign Ministry spokesman, Yigal Palmor, dismissed Argentina’s declaration as “clearly meaningless,” in that it would not change anything on the ground. But he said it was nevertheless “regrettable” and “damaging.” Palestinian officials have said if peace negotiations fail, they will turn to the United Nations to seek recognition for a state, a move that would increase pressure on Israel.

For now, the administration will revert to brokering indirect talks between the Israelis and Palestinians. Next week, an official said, the chief Israeli negotiator, Yitzhak Molcho, and his Palestinian counterpart, Saeb Erekat, will travel to Washington to meet with American officials.

Analysts said that, while embarrassing, the administration’s decision to abandon the freeze would enable it to reassess a policy that has been stuck on a single issue. “If it encourages that more comprehensive review, then it’s not a bad thing,” said Daniel Levy, a senior research fellow at the New America Foundation.

David Makovsky, a senior fellow at the Washington Institute for Near East Policy, said, “It’s the end of a phase for the administration: ‘We’re not focusing on the appetizers anymore; we’re focusing on the main course.’ ”