WASHINGTON - The United States will stop pushing Israel to freeze settlements in the West Bank as a condition for restarting direct peace talks between Israel and the Palestinians, a U.S. official said in Washington.

The move leaves renewed talks in doubt, after three weeks of negotiations with Israel in September failed to yield an agreement before a previous Israeli moratorium expired Sept. 26. Palestinian Authority leaders have said they will not return to face-to-face negotiations without a halt to settlement-building.

The Obama administration concluded that a moratorium by itself couldn't bring the sides closer to a peace agreement, said the official, who asked not to be named because the U.S. move hadn't been announced.

The United States decided it was more important to focus on fundamental issues needed to achieve a lasting peace, such as borders and the status of Jerusalem, the official said.

Secretary of State Hillary Rodham Clinton will outline a new U.S. strategy on Mideast talks in a speech Friday at the Brookings Institution in Washington, according to the Israeli newspaper Haaretz.

"The administration has belatedly recognized it was a mistake to make such a big deal of the settlements," said James Phillips, a Middle East specialist at the Heritage Foundation in Washington. "This is a sign that the administration is coming to terms with its own failure to correctly diagnose what was needed in these talks."

The shift in U.S. policy came almost a month after Israeli Prime Minister Benjamin Netanyahu presented a proposed 90-day moratorium to his cabinet.

The Obama administration had offered Israel, in exchange for a freeze on West Bank settlement construction, 20 additional F-35 fighter jets and U.S. opposition to any peace deal that international bodies might impose.

The Israeli government had no immediate comment. Maen Rashid Areikat, the Palestine Liberation Organization's representative in Washington, said it was too early to comment "unless it becomes an official U.S. position."

Palestinian Authority President Mahmoud Abbas said Nov. 21 that he would reject any U.S. proposal seeking to resume talks with Israel that didn't include a similar freeze in East Jerusalem, which Palestinians want as a capital of an independent state.

Abbas has been seeking alternatives to direct peace talks amid growing signs that a U.S.-led effort to persuade Israel to suspend West Bank construction was failing to materialize.

In an alternative to direct talks, Palestinian chief negotiator Saeb Erakat said Nov. 4 that the Palestinian Authority would pursue a bid to gain recognition of statehood by the U.N. Security Council.

Argentina announced Monday that it would recognize a Palestinian state with pre-1967 borders, and Uruguay pledged to do the same next year. On Dec. 3, Brazil recognized an independent Palestine, an action that State Department spokesman Philip J. Crowley described Tuesday as "counterproductive."