Israel's efforts to reach understandings and achieve reconciliation with the Vatican have failed for the time being.

The talks between Israeli officials and the Vatican have hit a dead-end, Ynet learned Thursday. The failure mostly stems from disagreement in respect to the Vatican's demand for sovereignty at the Last Supper Room on Jerusalem's Mount Zion. The Vatican also upheld its objection to the confiscation of Church land across Israel for public purposes.

Israel's delegation to Rome was led by Deputy Foreign Minister Danny Ayalon, who engaged in talks with his Vatican counterpart, along with expert teams on legal and financial issues.

Israeli officials hoped that Thursday's meeting would end a crisis that has persisted for almost 15 years. During this period, the Church resisted any confiscation of land by Israel and refused to pay taxes to the State. Moreover, the legal and social status of Church officials in Israel has not been fully arranged.

'We still want dialogue'
Israel's team headed to Rome in the wake of lengthy preparation work. Officials expressed optimism over the prospects for agreement, yet after seven-hour discussions Thursday the sides failed to reach a breakthrough. Moreover, Israel says the parties are back to square one after the Vatican annulled previous understandings.

"We can definitely say that there is a certain crisis," Deputy Minister Ayalon told Ynet. "We decided not to call it quits, and rather, to agree to disagree. Yet there is no doubt that following today's meeting we feel that we stepped back, and all the agreements we reached ahead of the meeting were in fact annulled."

"Yet despite the sense of rift, I urged the Vatican to engage in diplomatic dialogue with Israel anyway," Ayalon said. "We are interested in talking to them about the issue of global anti-Semitism, the war on terror, and Islam's radical factions. I invited my counterpart to visit Israel in order to discuss these issues."