U.S. Secretary of State John Kerry cancelled plans to travel Wednesday to Ramallah after both the Israelis and the Palestinians announced moves likely to scuttle the peace talks.
"We are no longer travelling tomorrow," a senior State Department official said, shortly after Palestinian president Mahmoud Abbas said the Palestinians would seek membership of 15 U.N. agencies.
Israel also announced new tenders for housing settlements.
Under the terms of a July accord for resuming the talks after a three-year break, both sides had vowed not to take such moves for nine months.
Israel has also failed to release this weekend as agreed a fourth and final group of Palestinian prisoners, ahead of an April 29 deadline for a peace deal.
Kerry called on both sides to show restraint, after holding more than four hours of talks with Israeli Prime Minister Benjamin Netanyahu on a surprise trip late Monday to Israel.
But Kerry told a press conference after taking part in talks on Ukraine at NATO that he was not sure yet whether he would return to the Middle East region as had been announced only hours earlier.
"My team is on the ground meeting with the parties even tonight," the top U.S. diplomat said.
"We urge both parties to show restraint," he added.
Asked if he was going back to Israel and the region, he replied: "I'm not sure I'm going.... We have certain things we are trying to figure out in terms of the logistics on the ground and what is possible."
U.S. officials said Kerry had already talked with Netanyahu following Abbas's announcement, and planned to call the Palestinian leader as well later Tuesday.
But the chief U.S. diplomat, who has been working for months to try to broker an elusive peace deal, insisted it was too early to draw any conclusions on the fate of the process.
"It is completely premature tonight to draw... any final judgement about today's events and where things are. This is a moment to be really clear-eyed and sober about this process," Kerry said.
"It is difficult, it is emotional, it requires huge decisions, some of them with great political difficulty, all of which need to come together simultaneously.
"Obviously it's moments like this where we all need to remember exactly what brought us to this effort in the first place, what the goal is and where everybody wants to end up."
Israel and the Palestinians announced moves earlier Tuesday likely to scuttle peace talks, hours before Kerry was to fly back to the region in a bid to save them.
Washington's top diplomat wrapped up a lightning visit to Israel earlier in the day, but his departure was rapidly followed by news Israel had reissued tenders for hundreds of settler homes in annexed east Jerusalem.
Abbas then announced a request to join several U.N. agencies, abandoning pledges to refrain from doing so during nine months of talks that were to end April 29.
The moves my both sides looked set to preclude any extension of talks, which the Americans had been pushing for during Kerry's latest visit.
U.S. peace efforts were already teetering on the brink of collapse after Israel refused to free a fourth and final group of 26 veteran Palestinian prisoners which would have completed an agreement that brought the sides back to negotiations last July.
The negotiations have faltered over several issues, notably Israel's settlement expansion in occupied Palestinian territory, with the Palestinians demanding a freeze on all settlement construction, including in east Jerusalem.
Tuesday's 708 tenders in the east Jerusalem settlement neighborhood of Gilo came on top of thousands of new homes the Jewish state has announced during the talks.
Palestinian leaders had repeatedly threatened to resume their action through international courts and the U.N. over Israel's settlement expansion on occupied territory in the West Bank and east Jerusalem, which is considered illegal under international law.
They agreed to refrain from such action during the talks, and Israel in turn said it would release 104 long-serving Palestinian prisoners.
But Israel has refused to release the final batch of prisoners, using it as a bargaining chip to try and extend talks, a move that prompted furious Palestinian officials to warn they would break off negotiations.
On Monday, the Palestinians had given Kerry a 24-hour deadline to come up with a solution to the prisoner row, warning failure to do so would see them turning to U.N. bodies to press their claims for statehood.
And Abbas announced late Tuesday on television a request to join "15 U.N. agencies and international treaties, beginning with the Fourth Geneva Convention," after signing the demand during a meeting at his Ramallah headquarters.
"The demands (for membership) will be sent immediately" to the relevant agencies, he said.
"This is not a move against America, or any other party -- it is our right, and we agreed to suspend it for nine months."
Prior to Abbas' announcement, Kerry had been due back in the region for a meeting with the Palestinian president on Wednesday.
Kerry met Israeli Prime Minister Benjamin Netanyahu for two hours late Monday before entering talks with Palestinian negotiators at his Jerusalem hotel, and the pair held a second meeting early Tuesday.
U.S. efforts have been currently focused on getting the parties to agree an extension to the end of the year.
A U.S. proposal to continue talks was to include a limited freeze on settlement construction, with Israel adopting "a policy of restraint with (West Bank) government tenders" but would not include annexed east Jerusalem.
Sources close to the negotiating teams confirmed Washington was also mulling a proposal to free spy Jonathan Pollard, who was arrested in Washington in 1985 and sentenced to life imprisonment for spying on America on Israel's behalf.
"The emerging deal... contains the following elements: the release of Jonathan Pollard before the Passover holiday (in mid April) and the extension of the negotiations with the Palestinians into 2015," one of the sources told Agence France Presse.
He said the fourth batch of prisoners would be freed -- "including Israeli Arabs" -- and Israel would also agree to free another 400 security prisoners not involved in deadly anti-Israeli attacks.
The release of Arab Israelis jailed for nationalist attacks has been bitterly opposed by many within Netanyahu's ruling right-wing coalition.
There was no immediate comment from the Americans.
Palestinian negotiators say they will only agree to extend the talks if Israel frees another 1,000 prisoners, including political heavyweights, the sick, and women and children.
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