Negotiations don't work when both sides can still fight. Negotiations only work when either both sides are too exhausted to fight or it's basically checkmate and both sides know it.
We're not at either stage now, so they will keep fighting.
As for NATO's position...it does not want to tell belligerent nations that it's ok to invade on territorial expansion missions - and that if it doesn't work you can just negotiate back to square one. And NATO is perfectly happy to have a proxy destroy Russia's armed forces while testing NATO weapons and seeing how RU weapons and training work.
In short, no one yet has a reason to push hard for a settlement. We're just not there yet.
At this point I think this ends in a RU collapse...with the RU army deciding it doesnt' want to fight anymore and just disappearing into Mother Russia. UKR will move to the border and dig in.
The real problem is Crimea....UKR would suffer some of the same problems RU faced there...informants and guerrillas. That's a very sticky wicket.