A member of the PLO's negotiating team said Thursday that the Obama administration had all but given up its efforts to restart peace talks at least until US midterm elections next month.

Fatah leader Nabil Sha'ath said the US position threw the Palestinian Authority into crisis through its handling of the talks, which ended in September when Israel opted to renew building settlements in the occupied territories.

Sha'ath told Ma'an radio that the PLO accepted a delay of one month while the White House sorted out the early November elections, during which the US president's Democratic party is expected to lose seats.

In Washington, US State Department spokesman Phillip Crowley said reports that the US was stalling in order to avoid a diplomatic setback for President Barack Obama were "nonsense."

"We’re doing what we can, not on a political timetable in this country but to gain an agreement on comprehensive peace that ends the conflict once and for all," he told reporters.

US Secretary of State Hillary Clinton, meanwhile, said there was "no substitute for face-to-face discussion" to resolve the conflict. At a Washington dinner for the American Task Force on Palestine advocacy group, she said negotiations were "the only path that will lead to the fulfillment of the Palestinian national aspiration."

Clinton reiterated the US position in favor of the two-state solution, which she said was critical for Israel's long-term future and to end "the indignity of occupation" for Palestinians.

The Arab League has given talks a one-month deadline before pursuing other means of establishing a Palestinian state. President Abbas is scheduled to visit Cairo on Friday to consult with Arab leaders.

In Jerusalem, Israeli Prime Minister Benjamin Netanyahu said construction in existing West Bank settlements "does not contradict the aspiration for peace and an agreement."

Addressing the Knesset at a session to mark the 15th anniversary of the assassination of Prime Minister Yitzhak Rabin, Netanyahu said the partial settlement freeze was only a temporary gesture.