In some cases the clustering algorithm will not be able to converge on a solution. The tool will try 100 times, and if no solution is found, it will stop trying.
The algorithm will likely be resolved if you use different seed features. If the tool is finding optimized seeds for the Initialization Method, just running the tool again will likely result in a solution. If it doesn't, try creating a Seed Field to specify seed locations. If you are already using a Seed Field, try changing one of your seed features. Getting this error is rare, so if you continue to have problems with this, report the problem to Esri Technical Support for the Spatial Statistics team.