Kerry talks failed at the moment they started. Israel will never give up the occupation unless forced to, Kerry talks started with the occupation intensifying (settlements, night arest raids, etc.). By allowing settlements to continue Kerry made clear he was not willing to pressure Israel. That made (together with an middle man with a very pro-Israel track record) that Israel had nothing to fear and could continue the occupation..
Australian police arrest 5 over shooting 'linked to terrorism' (Reuters)
from the article: Kerry places blame on Israel for crisis in peace talks