The Palestinians told US Secretary of State John Kerry that they’ll terminate negotiations with Israel forthwith unless Jerusalem halts a plan to build 20,000 housing units over the Green Line, Channel 2 reported on Sunday.

According to the report, furious Palestinian officials sent a clear message to Kerry, apparently over the weekend, that if Israel doesn’t freeze the settlement construction plans as stated, they will no longer attend any more peace negotiations.

As proof that the construction process is still going ahead, despite Israel’s claims to the contrary, the Palestinians noted that the projects in question were still listed as active on the Israel Housing Ministry website at the end of last week, the Channel 2 report said. The unnamed Palestinian officials regarded this as a broken promise by Israel and by the Americans, who had attempted to calm the situation after the announcement of the settlement construction plans last month.

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The Prime Minister’s Office, however, insisted that the construction plans were halted, as promised.

Last month the Housing and Construction Minister Uri Ariel (Jewish Home) announced tenders for some 20,000 units in the West Bank and the controversial E-1 corridor near Jerusalem – setting off an international outcry, which led Prime Minister Benjamin Netanyahu to order Ariel to pull the plug on the plans.

Peace talks between Israelis and Palestinians restarted in late July. Although they have continued out of the media spotlight, reports have mounted that that two sides have reached an impasse.

Last week, senior Palestinian official Nabil Shaath said negotiations with Israel have already failed, and that the prospect of freeing Palestinian prisoners from Israeli jails is all that’s keeping the talks alive. Top negotiator Saeb Erekat told reporters that the world needs to get tough with Israel over its continued settlement building to ensure the remaining five months of talks won’t be wasted.

Earlier Sunday evening, former prime minister Ehud Olmert launched an attack on Netanyahu’s settlement construction policies, saying all of Israel’s security concerns — including that posed by Iran — could be solved by reaching a lasting peace agreement with the Palestinians.

“The key to any strategic situation in the Middle East and the Iranian problem is to reach a peace agreement with the Palestinians,” he said during a a panel discussion at the Institute for National Security Studies in Tel Aviv.

The former prime minister also railed against the Netanyahu government’s approval of thousands of settlement housing units, saying such a move could only set back negotiations with the Palestinians.

“A government which announces the construction of 5,000 new housing units is not conducting serious negotiations for peace,” Olmert remarked.