Washington's failure to revive direct peace talks between the Israelis and Palestinians should finally dispel any lingering illusion that the decades-old Middle East conflict can be resolved in open negotiations.

The best that can be hoped for are piecemeal, staggered accords, perhaps thrashed out in secret and probably implemented over many years, analysts and diplomats say.

"We should have read the last rites to the idea that you can have a bilaterally negotiated two-state solution long, long ago," said Daniel Levy, a former Israeli peace negotiator and now a senior research fellow at the New America Foundation.

"It is ridiculous to pretend that this kind of a peace process is still alive," he added.

The latest doomed chapter in Middle East diplomacy was opened in September by U.S. President Barack Obama, with major powers predicting that the two sides could reach a comprehensive deal in one year of face-to-face encounters.

But, true to their warnings, the Palestinians quit the talks only three weeks later when the Israelis refused to extend a partial freeze on Jewish settlement building on occupied land.

The United States offered Israel a package of inducements to convince them to prolong the freeze. The hope was that in 90 days, talks would make enough progress on the key issue of borders to make the settlement issue redundant.

On Tuesday night, U.S. diplomats admitted the discussions had failed and said they would seek alternative solutions, including a possible return to indirect, shuttle diplomacy.

Yasser Abed Rabbo, a senior aide to Palestinian President Mahmoud Abbas, questioned whether Washington could ever broker a deal.

If the United States could not get Israel to halt settlement "for a limited period", how would it be able "to make Israel accept a balanced solution on the foundation of international resolutions and the two-state solution?", he asked.

LOOKING GLUMLY TO THE FUTURE

There was already abundant pessimism when the talks started, with Israelis and Palestinians questioning how seemingly intractable issues such as the future status of Jerusalem, which is claimed by both, could be resolved in a 12 month timeframe.

"We shouldn't assume or suppose that we are the generation that will solve the problem or bring the negotiations successfully to their end", said Daniel Reisner, a member of the Israeli negotiating team.

Some diplomats have hinted that the United States might now try to end the stalemate by presenting their own suggestions for the borders of a future Palestinian state, looking to impose a solution on the recalcitrant Middle East duo.

But professor Yossi Shain, head of the school of diplomacy at Tel Aviv university, said the United States was not in a position to impose any such thing and risked losing yet more diplomatic capital if it tried and failed.

Likewise, he thought the Palestinians would not push their threat to try to force Israel's hand by seeking recognition as an independent state at the United Nations.

"The Palestinians will never declare independence because the Americans will not allow it. They don't want chaos," said Shain.

WANT TO BE ALONE

Most likely, very little will happen in the near future, at least on the surface.

The Palestinians will go on building their burgeoning economy and new institutions in the West Bank. The Israelis will focus their attention on the threat posed by Iran, and continue building Jewish settlements on occupied land the Palestinians want for a state.

Analysts say no one loses from the failure to revive direct talks, and that is one of the problems.

"So long as there are no consequences for the maintenance of the status quo why on earth will anyone expect anything different to happen," said Levy, speaking from New York.

But diplomats in Jerusalem said they did not expect all channels of discussion between the Palestinians and Israelis to shut down, just because the U.S.-brokered meetings were over.

Both sides would undoubtedly feel more comfortable with discreet talks, far from any media frenzy or domestic political pressures. They might even decide it is better to talk alone.

Both Israel's groundbreaking peace deal with Egypt and its breakthrough talks with the Palestinians, which culminated in the Oslo accords, were initiated in deep secrecy, with Washington kept out of the loop at the start.

"The best thing the Israelis and Palestinians could do is avoid these diplomatic circuses and talk to each other in secret in some distant country," said a European diplomat in Jerusalem.