By saying he wants to step down as president, Mahmoud Abbas has highlighted a deep Palestinian despair rooted in decades of failed peace initiatives and fruitless violence.

Neither strategy has yielded a Palestinian state, and Israeli settlements still encroach on lands that would make up their would-be nation.

Facing a hawkish Israeli government and an Obama administration reluctant to put muscle behind its demands on Israel, many Palestinians say they see no hope at all.

"I am frustrated with so-called peace and the so-called 'two-state solution,'" said Rami Hassouna, a 34-year-old construction contractor in the West Bank city of Ramallah. "If all of this was 1 percent possible before, now I think it's impossible."

Moderate Palestinians are worried that Abbas, in saying he doesn't want another term in office, will only deepen frustrations and boost the militants who claim violence is the only option.

Some top Israelis also urged him to reconsider, but the widespread feeling on their side is that they offered Abbas sweeping concessions and got no response.

While Israel in recent months has eased restrictions on movement in Palestinian areas and the West Bank has enjoyed a limited economic recovery, the political stalemate is raising the specter of new violence.

"I think that this position of President Abbas is ringing the alarm that things have been deteriorating in Palestine and in Palestinian-Israeli relations," said Palestinian government spokesman Ghassan Khatib.