RAMALLAH (AFP/Reuters) - The US has admitted it failed to secure a new Israeli settlement freeze, a Palestinian official said Thursday, dealing a potential knockout blow to renewed peace efforts. The US administration has informed us that the Israeli government did not agree to a new settlement freeze, said the official, who spoke on condition of anonymity. The US administration will continue its efforts, the official added. Chief Palestinian negotiator Saeb Erakat told AFP earlier Thursday that Palestinian president Mahmud Abbas was to meet with US consul general Daniel Rubinstein in the course of the day. The US consulate would not immediately comment. The United States should openly blame Israel for the collapse of the peace process, a senior Palestinian official said on Thursday, in one of the bleakest assessments yet on Middle East peace efforts. New Israeli plans to build near East Jerusalem show Prime Minister Benjamin Netanyahu does not want to resume peace talks, Palestinian officials said. Its time for the American administration to tell the world that Israel holds the responsibility for the collapse of this peace process, chief Palestinian negotiator Saeb Erekat said. Israel has chosen settlements and not peace, he told Reuters. The Palestinian officials said Israels new settlement building plans amounted to a rejection of the US efforts. Erekat said the United States should now recognise a state of Palestine in the West Bank and the Gaza Strip with East Jerusalem as its capital if it wished to preserve the two-state solution. Referring to the Pisgat Zeev building plans, Abu Rdainah said: It looks like this is an Israeli message to the Palestinians and the Americans that they are refusing any deal resuming the negotiations. A spokesman for Israeli Prime Minister Benjamin Netanyahu too had no comment but pointed out that the premier told the Knesset on Wednesday that Israel was working closely with the United States... to find an effective route to resuming talks. The United States has for weeks been trying to convince Netanyahu to impose a new moratorium on settlement construction in the West Bank. The talks ground to a halt after the ban expired and settlement building resumed. Abbas has said any new moratorium must apply to building in east Jerusalem, a demand that Israel has rejected. The idea of even a partial new freeze on West Bank settlement construction is deeply unpopular among many in the Israeli parliament, including in Netanyahus own cabinet. Israeli forces killed two armed Palestinians planning a terror attack as they approached the northern border fence of the Gaza Strip, the military said on Thursday. IDF (Israel Defence Forces) thwarts terror attack in northern Gaza, a statement from the military said. Overnight, an IDF force identified a number of armed Palestinians near the security fence in the northern Gaza Strip, said the statement. An IAF (Israel Air Force) aircraft, accompanied by an IDF ground force using tank shells, fired towards the militants, identifying a hit. The military said later in a statement its soldiers searched the area after the incident and found the bodies of two terrorists of the Islamic Jihad organisation, and on them light weapons, uniforms and an explosive device. A military spokesman told AFP the men were killed inside the Gaza Strip before they entered Israeli territory.