Although there is a denial from Ambassador Oren, the story regarding Rahm Emanuel is quite believable.He is reported to have said that he is tired of the 'PEACE PROCESS" and if the parties don't make progress the US will withdraw from the process,as it is taking up too much time.
Firstly a great deal of the failure of the talks falls on his shoulders.He used the tough guy routine with Bibi,and convinced Obama to demand a full cessation of settlements,and promised Abbas that it would happen.Once Israel refused,Abbas has held out and refused to negotiate.
Emanuel because he is Jewish thought that they could push Israel,and perhaps bring down the Neatanyahu govt.Not only did he fail,but the left wing collapsed in Israel ,the country rallied around Bibi and the Israeli public has a very low opinion of Obama as a friend.
I predict that when the Dems lose some seats in the Senate, the President will finally have to deal with the Republicans and he will need to get rid of his Chicago team,and bring in a more moderate chief of staff like Tom Daschle or Byron Dorgan.