Have your agent find out if there are any other Buyers. If there are none then Fannie Mae will probably continue the negotiations until they have come to their bottom line. You will notice when they have hit their bottom line when they stop countering you and let you know this is it, take it or leave it.
Good luck with your home purchase!
In my opinion you should counter to what would make you happy, if they reject it you can accept their original counter. If...they have not acepted another offer within that time.