Palestinian President Mahmoud Abbas said Sunday that he was holding Israel responsible for the impasse in direct negotiations, but vowed to continue to search for solutions that could yield to progress in the recently renewed peace process.

Speaking to reporters after his meeting with Jordanian King Abdullah II, Abbas said "there is an impasse, because we cannot carry on with the negotiations, and we have to follow up this impasse with the Arab side".

"Of course, we are not going to sever ties with the Americans, and we will continue to have contacts with them to search for solutions, but the settlement building should stop and then we will return to the negotiating table," Abbas said.

The Palestinian leader's comments came a day after the Palestinian Liberation Organization announced it would halt direct talks with Israel as long as settlement construction continues. The decision was announced by the general secretary of the PLO, Yasser Abed Rabbo.

Abdullah also met Sunday with U.S. envoy George Mitchell, who was shuttling between Jordan and Cairo this weekend in an effort to salvage the peace negotiations.

A statement from the royal court said Mitchell briefed the monarch on his efforts to ensure the talks continue following the expiry of Israel's construction moratorium.

Abdullah meanwhile underlined the "pivotal U.S. role in peace efforts and in finding the suitable environment for continuing the peace negotiations and the achievement of progress towards resolving the Palestinian-Israeli conflict on the basis of the two-state vision," according to the statement.

Abdullah expressed backing for the Palestinian stance and warned that "more tension and war" would be a consequence of failure to find peace in the Middle East.

In Cairo earlier on Sunday, Mitchell said both Israel and the Palestinians wanted to continue direct peace negotiations, despite an ongoing dispute over Israel's refusal to renew its moratorium on construction in West Bank settlements.

“Both the governments of Israel and the Palestinian Authority have asked us to continue these discussions in an effort to establish the conditions under which they can continue direct negotiations," Mitchell wrote in a statement posted on the U.S. Embassy in Cairo's website. "They do not want to stop the talks."

Hamas, meanwhile, welcomed the PLO decision to suspend peace talks with Israel as "a good step," but said it needed to be followed by others "to ensure it is not a tactical decision."

"Our position concerning the negotiations is clear, in that we reject being dependent on the American will," said Hamas leader Ismail Haniyeh, whose movement rejects any permanent accommodation with Israel.

Despite the PLO's declaration, the Palestinian leadership and Arab countries appear in no hurry to actually make the decision final. In all probability the Americans have requested time from the Arab states to reach a compromise on the settlement issue.

A meeting of the Arab League monitoring committee on the Arab peace initiative, which was initially scheduled to decide Monday on the future of talks with Israel, was deferred until Wednesday and then again until Friday. It will be held in Libya on the sidelines of next week's Arab summit meeting there.

Abed Rabbo said the Palestinian leadership viewed Israel as responsible for the failure of the talks and for scuttling American and other international efforts. At the same time, the leadership welcomed the attempts at reconciliation with Hamas, following understandings reached last week between senior Hamas and Fatah officials on the renewal of talks between the organizations.

Prime Minister Benjamin Netanyahu's office has said efforts to find a creative solution on the matter continue, but over the weekend the prime minister's bureau began pointing fingers at the Palestinians in advance of a possible total halt to the talks.

Following the PLO's announcement of the suspension of talks, Netanyahu released a statement calling for Abbas to continue negotiating, with the goal of achieving a peace agreement within a year.

The prime minister said this must be achieved by sitting around the negotiating table rather than leaving it. Netanyahu has said there is still a chance that a compromise can be reached, enabling the continuation of the direct talks.

In surprise remarks, Egyptian Foreign Minister Ahmed Ahmed Aboul-Gheit was critical in remarks to the London-based newspaper Al-Hayat of the view that there should no longer be direct talks with Israel as long as settlement construction continues.

He said such an approach would mean a lost opportunity to set the future borders of a Palestinian state. Aboul-Gheit also hinted that Hosni Mubarak would run for reelection in Egyptian presidential elections in November 2011.

Netanyahu will not agree to any compromise that involves a resumption of the settlement construction freeze. He is currently suggesting a commitment to restrained construction activity, possibly under American supervision.

He told advisers on Friday that such restrained building would not in any way affect final borders and said that unlike Israel, the Palestinians were becoming less flexible.