US special envoy George Mitchell has failed to reach consensus about conditions for Israel and the Palestinians to resume peace talks.

As a result, Israeli Prime Minister Benjamin Netanyahu, Palestinian Authority President Mahmud Abbbas and US President Barack Obama will no longer meet for an informal summit that had been planned at the UN General Assembly next week. A week of shuttle diplomacy by Mr Mitchell failed to produce concrete results. The main stumbling block remains Israel's settlement policy. Israel says it would only be willing to halt the expansion of its settlements temporarily. The Palestinians insist on a complete stop, with the US seeking a long-term suspension. A proposal by Israeli President Shimon Peres to first discuss the possible borders of a Palestinian state failed to find favour with the Palestinians.

Benjamin Netanyahu (r) receives George Mitchell (Foto: EPA)