"It's not surprising that the sides need some time to pause and to reflect," State Department spokeswoman Victoria Nuland said.

"Our hope is that this'll only be a little short period and that they will be able to get back to the table relatively quickly. And that's what we are urging them to do," Nuland told reporters.

In the West Bank town of Ramallah, a Palestinian official said US President Barack Obama is urging the Palestinians to continue talks with Israel, a day after low-level discussions appeared to be over.

Israeli and Palestinian negotiators met for a fifth round of exploratory talks about a way to resume direct negotiations under a framework proposed by the international peacemaking Quartet.

The Palestinians say the talks have produced no progress and pledged that Wednesday's meeting would be their last.

The Quartet, comprising the European Union, Russia, the United Nations and the United States, called on October 26 for both sides to present comprehensive proposals on territory and security within three months.

The Palestinians say they have done so, but the Israelis say they consider the three-month period to have begun with the first round of exploratory talks on January 3.

Following discussions with Jordan's King Abdullah II on Wednesday, president Mahmud Abbas said the Palestinians would now hold a series of consultations, both domestically and with the Arab League, before deciding on their next step.

Salam Fayyad, a moderate whose remit does not extend beyond the West Bank, told delegates at the Davos forum of global business leaders that the peace process was desperately in need of outside help.

But, speaking at the same debate, Israeli President Shimon Peres said it would be better if world powers left the two sides alone and let them get on with direct negotiations, convinced that a solution was still within reach.

The peace process has been effectively in the deep freeze since the end of September 2010, several weeks after it was relaunched to great fanfare under the mediation of US President Barack Obama.

Efforts by the international quartet to coax both sides back to talks have failed to bear fruit while the Arab uprisings have changed the regional dynamic -- particular with the downfall of Hosni Mubarak, Egypt's long-time president and a rare friend of Israel in the Arab world.

Fayyad told delegates that things had never been so bad since the start of the peace negotiations in 1991 that eventually led to the Oslo accord in 1993.

"There must be hope, we have to maintain hope. If you are Palestinian, hope is something that must be part of conscious decision-making," said Fayyad.

"But right now one would have to really work hard to be hopeful as to where the political process is.

"Since the beginning of Oslo, the political process has never been so lacking in focus.

"Obviously we need to sit down and negotiate but it's recognised that we need a significant amount of international help and chaperoning in order to do this."

Peres, who won the Nobel peace prize for helping negotiate the Oslo accords, said the gap between the two sides had been "seriously narrowed and neither Palestinians or Israelis have any serious alternative but to make peace".

But he was cool on outside involvement, saying the peace quartet -- which groups the European Union, the United Nations, the United States and Russia -- should not try to put pressure to bring the sides together.

"I think right now the major diplomatic effort should be done between the two of us because the quartet has its own split because there are elections in the United States and Russia," said Peres, a former Israeli prime minister whose current position is largely symbolic.

"There's a danger that if things are done under pressure, we will have an absurd situation."

Peres said the international community would be better off putting pressure on Iran to stop what he regarded as its interference in the Gaza Strip by supporting its hardline Islamist rulers Hamas.

Peres said the redrawing of the Middle East political map could work to Israel's favour if the new regimes tackle deep-rooted poverty.

"The real problem in the Arab world is poverty not politics," he said. "I am convinced that if the Arab world has better conditions Israel has a better chance of living in peace."

But Fayyad said the Palestinian cause was taking a back seat in the region as Arab governments try and come to terms with the popular revolts which swept the region last year.

"There's mmuch better understanding of the need to have a responsible, responsive government" in the Arab world after the uprisings, said Fayyad.

"But it seems to me that an immediate consequence of the Arab Spring, our cause has been marginalised by it in a substantial way.

"I do not recall that the Palstinian cause has been as marginalised in the way that it has been for many decades.