After weeks of fruitless endeavour, the United States has finally – and wisely – given up on its efforts to secure a renewed freeze on Israeli settlement construction in order to relaunch direct Israeli-Palestinian negotiations. Yet, amid speculation over how Israelis and Palestinians might now resume their talks, a reality is taking hold: the point is fast approaching where negotiations between the two will be, for all practical purposes and for the foreseeable future, over. As emissaries are dispatched and ideas explored, discussions could well carry on. But they will have lost all life, energy or sense of purpose.

Israeli prime minister Binyamin Netanyahu might not have been wholeheartedly committed to a peace deal with the Palestinians, but upon taking office several factors tugged him in that direction. He worried about US and regional pressure; he had concerns about his own public opinion; and he was unsure how Palestinians would react to a prolonged impasse.

He imagined that with creative ideas he might sway Mahmoud Abbas to move in directions the Palestinian leader had not foreseen. Plus, history beckoned, as Netanyahu caught a glimpse of himself as the man who finally would bring recognition and security to Israel. Over the past two years, the fears have receded and the promise has faded. Somewhat to his own surprise, Netanyahu resisted America's demands, called President Obama's bluff, and came out none the weaker.

Discontent from Arab regimes is real but flimsy, their preoccupations focused more on perpetuating their rule and thwarting Iran. A combination of Israeli military incursions and security measures, heightened co-operation with Palestinian security services, and West Bank fatigue, dramatically lowered the threat of significant violence. The impasse did not prompt divided Palestinians to reunite. And Netanyahu also faces little-to-no pressure from a domestic opinion – let alone his core constituency – wholly disenchanted by the peace process.

Getting together with Abbas has had the perverse effect of drawing the two men further apart. Netanyahu now senses that novel ideas will have little purchase on a man with secure convictions, and that substantive gaps between the two sides are far larger than he had hoped.

In the meantime, Netanyahu's right-wing coalition partners have awakened, threatening retribution in the event of forward-leaning diplomatic moves. The abstract lure of history has proved less compelling than the concrete constraints of the present.

Two years ago Abbas also harboured a faith of sorts. Part of it was fuelled by a lifelong belief that Israelis could be persuaded by sheer force of reason and logic of the need for compromise. He also invested high hopes in President Obama and, based on precedent, had little cause to believe a rightwing Israeli prime minister would necessarily be worse than a centrist or leftwing one.

What optimism there was did not last long, replaced by a growing sense of dejection. Abbas faced a heroic task for which he needed help from all. He got it from virtually none. Belief in the United States soon started to fade, a victim of Washington's serial tactical misjudgments and inability to live up to its promises.

Abbas felt betrayed too by Arab regimes that had pledged their support only to desert him at the first opportunity. On the domestic front, there is no political weight or momentum behind the negotiations. Not unlike Netanyahu, the Palestinian president emerged profoundly discouraged from their meetings, shaken by his counterpart's demands, staggered by the chasm separating their respective positions.

For Abbas, who has staked all on negotiations, the realisation was especially deflating. His rejection of violence is heartfelt and not something he is about to revisit. Yet only now is he coming to terms with its practical consequences, with no viable alternative to the failed diplomatic strategy.

The result is an acute feeling of powerlessness. To which one must add the Palestinians' wholesale reliance on foreign donors for economic and political support, further narrowing the scope for autonomous action.

It would not be the first time that Israeli-Palestinian negotiations reached an impasse. Yet this would be something different. If Netanyahu fails to reach an agreement, it could be a long while before any other Israeli leader succeeds. It would conclusively establish in the eyes of most Israelis that for now, peace is unattainable. A more centrist successor government would confront a more hostile landscape: a deal signed by the right would rally the left in support; a deal signed by the left would mobilise the right in opposition.

And no successor to Abbas with the required legitimacy or history waits in the wings. After him, the Palestinian movement – already tired and broken – will further tear itself apart. A long and arduous process of redefinition will commence. A historic compromise will not be on the cards.

Netanyahu's and Abbas's disillusionment is not merely a crisis. Short of an unexpected and seismic shift, it will represent, in more ways than one, the end of a road.