The United States has admitted it failed to secure a new Israeli settlement freeze to allow the resumption of peace talks, a Palestinian official told AFP on Thursday.

"The US administration has informed us that the Israeli government did not agree to a new settlement freeze," said the official, who spoke on condition of anonymity.

"The US administration will continue its efforts," the official added.

The United States has for weeks been trying to convince Israeli Prime Minister Benjamin Netanyahu to impose a new moratorium on settlement construction in the West Bank.

A previous 10-month freeze expired on 26 September, shortly after the launch of new direct peace talks between Israel and the Palestinians.

The Palestinian disclosure came after President Mahmoud Abbas said yesterday that he was expecting to formally hear the outcome of US efforts to secure a new freeze on settlement building within a day.

"We still haven't received an official US response, but we may get one officially on Thursday," Abbas told reporters as he inaugurated a new building at his West Bank headquarters in Ramallah on Wednesday.

Three weeks ago, US Secretary of State Hillary Clinton offered the Israeli leader a package of political and security incentives in exchange for a new three-month moratorium.

Israel said it would consider the offer if it were put in writing, but the US letter never arrived, prompting widespread speculation that Washington's efforts to secure a new freeze have failed.

Without a new ban on settlement construction, the Palestinians say they will not return to the negotiating table.

"If it (a freeze) is accepted, we are ready; if not, we will announce that this option is over and we will turn to other options," Abbas said.

But Abbas asserted that the Palestinians still have a range of alternatives, one of which is seeking UN recognition for a unilateral declaration of Palestinian statehood.

The Israeli government confirmed the news indirectly, when authorities in Jerusalem authorised, on Wednesday, the construction of another 625 homes for Israeli settlers in occupied East Jerusalem.

Palestinians insist that any new moratorium must include East Jerusalem, the proposed capital of the future Palestinian state.

The local news site Ynet reported that an interior ministry planning committee approved construction of homes in Pisgat Zeev, an Israeli settlement in East Jerusalem, after a two-year delay. If the construction plan proceeds, it could lead to further Palestinian and international anger.

In a message to the UN on Monday, Palestinian president Mahmoud Abbas warned that Israel's settlement of occupied territories had become "a time bomb" that could destroy peace hopes at any moment.

On the same day, the Jerusalem city council approved 130 new Israeli homes in Gilo settlement, also in East Jerusalem, drawing immediate protest from Palestinian officials.

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