A Palestinian protester runs during clashes with Israeli troops at a protest calling for the release of Palestinian prisoners held in Israeli jails, outside Israel's Ofer military prison near the West Bank city of Ramallah April 4, 2014. [Photo/Agencies]

When Kerry convinced Obama to push Middle East peace toward the top of his second-term foreign policy agenda last year, the strategy was cast as a way to create goodwill toward the United States.

The idea was not only to win credit for tackling the decades-old Arab-Israeli conflict but also to rob Islamist groups like al Qaeda of a recruiting tool and take away one of Iran's main arguments for supporting anti-Israel militants.

But Kerry's peace drive was met with deep skepticism from the start, and over the course of more than eight months of tireless diplomacy neither side has been willing to make the tough compromises needed to achieve a peace deal.

That has prompted Kerry to steadily scale back his ambitious goals - to the point where now even getting talks extended beyond an April 29 deadline would qualify as an achievement.

Negotiations plunged into crisis last week in a series of tit-for-tat moves by Israelis and Palestinians.

By stepping away for now, Kerry has reminded the parties that he can ill-afford to focus endlessly on a fruitless peace process when other pressing international issues, such as the crisis in Ukraine, demand his attention, US officials say.

Israel and Palestinians were quick to restart discussions and the administration says it has not thrown in the towel, but the outlook remains bleak and Kerry can be expected to take a lower-profile role even if the peace process survives.

Despite having prioritized Israeli-Palestinian peace along with an Iran nuclear deal in his UN speech, Obama has mostly kept his distance from the nuts and bolts of the Middle East negotiations, seemingly wary that the effort could suffer the fate of his own failed first-term initiative.