Israel has issued new work permits for Palestinians from the West Bank as part of economic measures aimed at supporting the peace talks. But that is offset by new Israeli settlements, says Oxfam's Alun McDonald. "There are a lot of reasons to feel positive, but itis very hard to be optimistic when over the past few weeks there have been more announcements of settlements, there have been more demolitions of homes, and the occupation still continues," he said.

Settlements are a particularly difficult issue for Israel's coalition government, says Cato Institute analyst Doug Bandow. "The internal political dynamic is a very complicated one. It is hard to give those up. There is very little trust on both sides, so there is a lot of skepticism out there," he said.

Bandow says putting a peace deal to Israeli voters is especially perilous for a coalition government confronting divisive social issues of welfare benefits and military service for Orthodox Jews. "This really has to look good, it really has to look salable before Netanyahu is going to take ownership. He's got a lot else on his plate," he said.

Former Israeli negotiator Uri Savir says the momentum of the Oslo Accords is not entirely lost. "Peace processes take time. It is a difficult transition. But the foundations are still alive. And a two-state solution will still be achieved, I have no doubt," he said.

Kerry says time is the enemy of a peace process because it allows a vacuum to be filled by people who do not want things to happen.