US secretary of state John Kerry, who has made it a personal mission to breathe life into the long-stalled peace talks between Palestine and Israel, hinted on Friday that the negotiations are on the brink of collapse and said the Obama administration would reasses its participation in the process.

In the most pessimistic remarks since he launched the talks last July, Kerry told reporters it was “reality-check time” for all involved in the discussions. “It is regrettable that in the last few days both sides have taken steps that are not helpful and that's evident to everybody,” he told reporters in Morocco.

On Thursday, Israel scrapped the scheduled release of a group of Palestinian prisoners and called for the entire US-sponsored negotiations to be reviewed.

Kerry appeared to express frustration with the failure of both sides to make progress. “They say they want to continue,” he said of Israeli prime minister Benjamin Netanyahu and Palestinian president Mahmoud Abbas. “But we are not going to sit there indefinitely. This is not an open-ended effort. It's reality-check time.”

Kerry conceded that pressing foreign policy crises in Ukraine and Syria, as well as ongoing nuclear negotiations with Iran, made it difficult to dedicate resources to a peace process which has failed make significant progress.

“Clearly we have an enormous amount on the plate,” he said. “There are limits to the amount of time and effort that the United States can spend if the parties themselves are unable to take constructive steps. We are going to evaluate very carefully exactly where this is and where it might possibly be able to go.”

The White House said later that talks had reached a crunch point but insisted they had not yet collapsed. Asked if the talks were over, deputy press secretary Josh Earnest replied: "No. What I would said is we have reached a place when the Israeli leaders and Palestinian leaders need to spend some time thinking."

While both sides had taken steps that were "unhelpful" and led to a "degradation of trust" he said it was now down to Israel and Palestine to make difficult decisions that could not be imposed from Washington. "We remain committed to the task because the stakes are so high," he said. "As long as they [negotiators] are willing to talk that is something that we are going to facilitate."



Kerry was scheduled to return to Washington on Friday after Israel cancelled the scheduled prisoner release. Israeli officials blamed 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 marked the abandonment of the two key confidence-building measures put in place eight months ago 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 Israel's release of 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".

In recent days he made a last-ditch attempt to keep the talks alive, meeting Abbas last week in Jordan, and then flying to Israel from Paris on Monday to meet with Netanyahu.

He had planned to return to the Middle East on Wednesday to see Abbas again, but cancelled the plan on Tuesday when the Palestinian leader said he would seek greater international recognition by signing up to 15 UN treaties and conventions, in response to Israel’s decision not to proceed with the promised release of prisoners.

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.