Israeli negotiator Gilad Sher said a meeting planned for Tuesday with the Palestinians had been cancelled, but he denied that contacts had been broken off altogether.
"We have cancelled the meeting planned for today but one could be held in the next few days and it is not question of a suspension of the negotiations," Sher told AFP.
He declined to give a reason for the cancellation of the meeting.
However, senior Palestinian negotiator Saeb Erakat said they had been told by Israel that the talks were suspended.
"Unfortunately we were informed that Israel was breaking off the negotiations, which had only just resumed. They did not give a reason," he told AFP.
Although the two sides have been in contact since the collapse of the US-hosted Camp David peace summit almost two months ago, there have been no formal top-level negotiations and they missed a mid-September deadline for a final pact.
"Today we were supposed to meet and we have a schedule for the next six days," Erakat said, charging: "This is part of the Israeli strategy of finger pointing. It is regrettable."
Earlier Tuesday, Prime Minister Ehud Barak cast doubt on the prospects of reaching an accord with the Palestinians that would end half a century of conflict.
"I'm not sure there will be an accord," Barak told public radio.
"If there isn't we will be united in the knowledge that the current government has done everything to conclude a deal and to avoid the tragedy that could occur in the event of failure," he said.
Barak, who has repeatedly called on Palestinian leader Yasser Arafat to show "flexibility", said there could not be a deal without settling the most sensitive issue of Jerusalem, the holy city claimed by both Israel and the Palestinians as their capital.
But Erakat said that Israel was trying to blame the Palestinians for the deadlock in peace-making while Barak -- without a parliamentary majority since the eve of Camp David -- struggles with domestic political woes.
"His exit strategy is to work on his internal situation and blame us for the problems with the peace process," Erakat added -- JERUSALEM (AFP)
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