JERUSALEM – Israeli and Palestinian leaders traded accusations Wednesday over who was to blame for the collapse of talks that the Obama administration had hoped would lead to a comprehensive peace settlement within a year.

Both sides agreed, however, that the Obama administration wasn’t in a position to mediate a final peace deal.

The White House announced Tuesday that it had given up on its efforts to persuade Israel to freeze construction at Jewish settlements in the West Bank. The freeze was a key demand of the Palestinians before they would engage in face-to-face talks with the Israelis.

Chief Palestinian negotiator Saeb Erekat said that Israeli Prime Minister Benjamin Netanyahu “succeeded in torpedoing the peace talks” by refusing to freeze settlement construction. Nir Hefetz, a Netanyahu spokesman, said the Palestinians were finding “excuses” for refusing to talk.

The collapse of the talks was a major blow to President Obama’s foreign policy efforts. Only in September, the administration had trumpeted its efforts, saying it intended to bring the two sides together in face-to-face talks.

Yasser Abed Rabbo, an aide to Palestinian Authority President Mahmoud Abbas, said the failure of the Obama administration to make Israel stop construction raised questions about whether American officials were capable of overseeing the peace talks.

“The one who couldn’t make Israel limit its settlement activities in order to conduct serious negotiations, how can he be able to make Israel accept a fair solution?” Abed Rabbo told the Voice of Palestine radio station.

Israel’s West Bank settlements are considered illegal under international law. U.S. officials have called them a key stumbling block to peace negotiations.

Palestinians think that the settlements are built on land that’s earmarked for their future state. Continuing Jewish expansion in the West Bank creates “impossible” conditions for real peace talks, Erekat said.

While Netanyahu’s senior ministerial Cabinet kept mum on the future of the peace talks, the largely right-wing Israeli parties that make up his coalition celebrated what they saw as a victory.

Parliament Deputy Speaker Danny Danon praised Netanyahu for rebuffing U.S. efforts to force Israel into another “damaging and pointless” freeze.