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Prime Minister Binyamin Netanyahu told the US that the Israeli government coalition could collapse should he go through with the controversial 4th prisoner release , according to a report by the British periodical al-Hayat.The report further quotes Palestinian officials stating that Abbas has made clear his refusal to continue negotiations should the fourth prisoner release not come to fruition.The Prime Minister’s Office remained silent about whether Netanyahu intended to go ahead with the release. One official cited Justice Minister Tzipi Livni’s comment last week that there was never an “automatic commitment to release prisoners unrelated to making progress in negotiations,” and said that comment remained relevant.The US administration exerted pressure on the PA leadership to agree to postpone the release of the final batch of prisoners, a senior Palestinian official said on Thursday. Under the terms of the US-brokered deal that got the sides back to the negotiation table in July, Israel was to release 104 terrorists convicted of crimes before the 1993 Oslo Accords, and the Palestinians were going to delay diplomatic moves in various international organizations to gain statehood status.Western diplomats were also reported to have said that US Secretary of State John Kerry, in an effort to save the peace talks, has proposed to the Palestinians that the capital for a future Palestinian state be in East Jerusalem and re-worded Netanyahu's demand for recognition of the "Jewish State."Palestinian sources are said to have rejected these proposals.Kerry told Abbas that Netanyahu faces the possibility of a government collapse should he agree to the Palestinian demand for the 14 Israeli-Arabs to be released, a situation which would inevitably weaken the PM as a 'partner for peace.'Abbas has stated that he will discuss no issues until the fourth prisoner release is confirmed.Herb Keinon and Khaled Abu Toameh contributed to this report.