Middle East Peace Talks Stall As US Fails To Sway Israel Over Settlements

Palestinians and Israelis were tonight blaming each other for sabotaging peace talks after the US admitted it had failed to persuade Binyamin Netanyahu to freeze West Bank settlements to allow stalled negotiations to resume.

Mahmoud Abbas, the Palestinian president, who had insisted on a new moratorium on settlements before returning to direct negotiations, agreed the peace process was now ""in crisis"".

Abbas is due in Cairo on Thursday to consult the Egyptian president, Hosni Mubarak, and the Arab League. Egypt's foreign minister, Ahmed Aboul Gheit, said discussions should now shift to an ""endgame"" for resolving the issue.

Palestinian spokesmen expressed dismay at the news that the Obama administration had formally decided to abandon its efforts to persuade Netanyahu, the Israeli prime minister, to ignore rightwing critics and back down over settlements.

The US secretary of state, Hillary Clinton, is expected to insist in a speech in Washington on Friday that the US will not walk away from attempts to secure peace and the Obama administration remains committed to seeking a solution.

In the Middle East, Mustafa Barghouti, a member of the Palestinian parliament, told al-Jazeera TV: ""If the US fails to pressure Israel to abide by what … the international community demands – a complete freeze to settlement activities – then there is no peace process and the reason for this is Israel.""

Yasser Abed Rabbo, of the PLO executive committee, said: ""The policy and efforts of the US administration failed because of the blow it received from the Israeli government.""

But Israel's cabinet secretary, Tzvi Hauser, warned: ""The Palestinians need to understand, as the Americans do, that it is unacceptable for either side to set pre-conditions."""