Israel and the Palestinians appear determined to seal their divorce with Washington's deadline for reaching a Mideast peace deal set to expire.
After more than a year of intensive shuttle diplomacy by US Secretary of State John Kerry with the aim of brokering a deal by April 29, Washington's patience appeared thin on Monday as both sides distanced themselves from the crisis-hit talks.
Speaking to a closed meeting of international figures, Kerry reportedly said that if Israel didn't seize the opportunity to make peace soon, it risked becoming an "apartheid state".
"A two-state solution will be clearly underscored as the only real alternative. Because a unitary state winds up either being an apartheid state with second class citizens - or it ends up being a state that destroys the capacity of Israel to be a Jewish state," he said, according to a transcript obtained by The Daily Beast and published late on Sunday.
Although the process was at a point of "confrontation and hiatus", Kerry insisted it was not yet dead.
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But both the Palestinians and the Israelis appear to have drawn their own conclusions about the life expectancy of the US-led negotiations, which have made no visible progress in nine months.
Last week, Palestinian leaders in the West Bank and the Hamas-run Gaza Strip announced a surprise unity deal aimed at ending years of occasionally violent rivalry.
Israel denounced the deal as a deathblow to peace hopes and said it would not negotiate with any government backed by the Islamist movement. Washington called the deal "unhelpful".
Under the agreement, the Palestine Liberation Organisation and Hamas will work to establish a new unity government of political independents which would be headed by president Mahmud Abbas, whose Fatah party dominates the PLO.
It would recognise Israel, renounce violence and abide by existing agreements, in line with the key principles set out by the Mideast peacemaking Quartet.
But Prime Minister Benjamin Netanyahu has ruled out any negotiation with the new government unless Hamas accepts Israel, forcing Abbas to chose between the two.
Chief Palestinian negotiator Saeb Erakat accused Israel of using reconciliation as a weapon during the talks.
"Every day they were asking: what would you do with Gaza?" he told Voice of Palestine.
"So if peace cannot be achieved without Gaza, and it cannot be achieved with Gaza, then there is an Israeli aim here, and that is not achieving peace."
Meanwhile, in remarks in Gaza on Monday, Mussa Abu Marzuk, a top Cairo-based Hamas leader, reaffirmed that the unity government would "not be political".
He said its mandate would be primarily to prepare for elections within six months, restructuring the security services and overseeing the reconstruction of the battered Gaza Strip.
Tzahi HaNegbi, an MP close to Netanyahu, told army radio Israel should "wait to understand the meaning" of the Palestinian unity deal.
"Israel must act intelligently and with restraint, and not to play into the Palestinians' hands by helping them out of the trap into which they have fallen," he said.
Other commentators criticised the Israeli leader's handling of the crisis.
