Israel scrapped the scheduled release of a group of Palestinian prisoners and called for the entire US-sponsored negotiations to be "reviewed", in what could be a fatal blow to the current round of Middle East peace talks,

Officials blamed the Palestinian president, Mahmoud Abbas, and his decision to restart his push for membership of 15 UN bodies for the move, which was itself a Palestinian response to delays and wrangling over the prisoners' release.

The announcement marks the abandonment of the two key confidence-building measures put in place eight months to smooth the path of renewed peace negotiations between the sides in search of a two-state solution.

Last year, the Palestinians agreed to suspend a campaign for unilateral recognition at the UN bodies in exchange for the Israel releasing 104 prisoners who had been jailed before the Oslo Peace Process. The last and most controversial group had been scheduled for freedom last weekend but were never released.

The moves come amid evidence of mounting US impatience with both sides over the breakdown of the talks with US officials criticising the "unhelpful, unilateral actions" and US Secretary of State John Kerry demanding that both sides show leadership.

Kerry called it a "critical moment" for the peace process but vowed to continue his efforts "no matter what." Speaking during a visit to Algeria, he added: "You can facilitate, you can push, you can nudge, but the parties themselves have to make fundamental decisions and compromises. The leaders have to lead and they have to be able to see a moment when it's there."

The White House spokesman, Jay Carney, said any delay in the release of a fresh round of Palestinian prisoners "creates challenges" but that "dialogue remains open."

The announcement of the cancellation of the prisoner release was made in a statement by the Israeli negotiator and justice minister, Tzipi Livni, which claimed that the Israeli government had been working to finalise the agreement to free the prisoners when Abbas signed letters of accessions to 15 international conventions.

The Palestinian president said his actions were a response to Israel's failure to release prisoners as promised.

Israeli officials said they had formally requested Abbas to rescind the applications to join the 15 international bodies or face punitive measures. Livni said the prisoner release was contingent on the Palestinians refraining from making unilateral moves. She said that "new conditions were established and Israel cannot release the fourth batch of prisoners."

The latest moves come as Palestinian officials have reportedly threatened to seek membership of the International Criminal Court in addition to the other bodies, amid mounting recriminations on both sides.

The cancellation came a day after an acrimonious eight-hour meeting chaired by the US special envoy, Martin Indyk. According to unconfirmed reports from that meeting, Livni and the lead Palestinian negotiator traded threats over the consequences of the breakdown.

Palestinian sources told the Ma'an news agency that the meeting, which broke up at four in the morning, had degenerated into a "fierce political battle" in which Livni threatened to impose "endless sanctions" on the Palestinians, while Saeb Erekat threatened Palestinians would go the International Criminal Court at the Hague to try Israeli leaders as "war criminals".

Kerry's account of the meeting depicted it in less furious terms, saying there had been progress on "some of the questions that have arisen as a result of the events of the last few days. But there is a still a gap and that gap will have to be closed and closed very soon."

The prisoner issue is an emotional one for Palestinians after decades of conflict with Israel. Palestinians generally view them as heroes, regardless of the reason for their imprisonment. Israelis mostly view them as terrorists.