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By Tom Bateman
BBC News, Jerusalem
The UN envoy in Jerusalem has warned that surging violence in Israel and the occupied Palestinian territories has brought the situation to "the brink".
In a BBC interview, Tor Wennesland called for "firm" diplomatic intervention to stem the bloodshed.
He also warned of further deterioration due to declining international support for the Palestinian Authority (PA).
"The UN cannot take over this responsibility, we cannot govern Palestine," he said.
In the last month, more than 35 Palestinians and seven Israelis have been killed, following a year of spiralling violence involving near-nightly Israeli military search and arrest raids and a spate of Palestinian attacks.
It comes with the most radically nationalist government in Israel's history now in power, which has declared the principle of "exclusive" Jewish rights to all the land.
Meanwhile, a crisis-gripped PA, which governs to a limited extent parts of the West Bank, has been losing control of the cities of Jenin and Nablus to a new generation of armed militants.
Many observers fear a final demise of prospects for a so-called two-state solution - the long standing international formula for peace.
Mr Wennesland is the UN's special co-ordinator for the Middle East peace process, a post created during the breakthrough Oslo agreements of the 1990s. It now sees him frequently shuttling between Israeli, Palestinian and regional officials, trying to de-escalate crises and violent flare-ups, while hopes of a longer-term peace are moribund.
Mr Wennesland accepted there were "difficult" diplomatic conditions, given the "political situation… on the Israeli side" and the "complicated situation" with the Palestinian leadership.
But the envoy dismissed the suggestion that the peace process was dead.
"Whatever government we have in Israel, whatever authority we have in Ramallah, this is the point of departure where this discussion needs to take place," he said.
"We are very well aware of the agreements made in the formation of the Israeli government. I mean, diplomacy cannot stop there."
"The engagement we have seen over the last days and weeks is very good. It's high time and maybe it's even a little bit late. We should have started before."
International efforts towards a long-term solution have been stalled for nearly a decade. The Trump administration put forward a plan, now abandoned, which would have seen Palestinians given municipal control of pockets of the West Bank along with the Gaza Strip, with Israel given full security control.
The fallout from the plan's announcement sparked violence on the ground and saw the Palestinians cut off nearly all ties with the US.
Meanwhile, human rights groups increasingly call on the international community to acknowledge a "one-state" reality for Palestinians living under Israel's military occupation, now into its 56th year.
The UN envoy said there was now "active diplomacy" involving the Americans, the UN and Israeli and Palestinian officials.
Asked whether this would lead to fewer Israeli military raids or a restoration of PA control in parts of the West Bank, he said: "The American side is in very specific discussions with [the Israelis].
"There are plans that can be rolled out. So these paradigms may change. And I said there needs to be a space for the Palestinian security forces to operate.
"The key factor here is that the parties are not nursing their unilateral decisions… if we are going to keep the situation under control," he said.
He called on Israel to "firmly deal" with the issue of expansion of Israeli settlements and settler violence in the West Bank. He also said that Palestinian security forces needed to be able to regain control in the cities of Jenin and Nablus.
He urged a full resumption of so-called security co-ordination between Israel and the PA, which President Mahmoud Abbas last week announced he was cancelling.
"There are contacts, but we just had a discussion with the Palestinians on this yesterday. It is not happening in the way it has happened before. They have formally stopped it. It needs to get going again," he said.
The envoy said stability was also threatened by the worsening situation of the Palestinian Authority, saying some governments who helped fund it had "checked out".
"There is hardly any money coming in from donors to the PA and that needs to change.
"If you cannot pay salaries to public employees, if you cannot deliver health services, if you cannot buy medicine, if you cannot get the schools [funded], then we are in a very dire situation," he said, adding that UN funding was already about $1bn (£830m) alone in Gaza, which is controlled by the Palestinian militant group Hamas.
"We have significant programmes in the West Bank as well. But the UN cannot take over this responsibility. We cannot govern Palestine. We have no option or alternative to having a functional PA."