A top Palestinian Authority official on Wednesday questioned Washington's ability to forge Middle East peace after a new breakdown in American attempts to revive negotiations.

Yasser Abed Rabbo, a top aide to Palestinian Authority President Mahmoud Abbas, said the Palestinians were assessing their options before responding to the American announcement. While accusing the Israelis of being intransigent, he also voiced disappointment with the Americans.

The comments came after the US announced on Tuesday that it had abandoned efforts to persuade Israel to renew a settlement building moratorium as part of efforts to revive peace talks.

"We will assess if the US would be able ... to achieve success in its upcoming efforts," Abed Rabbo told the Voice of Palestine radio station.

"The one who couldn't make Israel limit its settlement activities in order to conduct serious negotiations, how can he be able to make Israel accept a fair solution," he added. "This is the big question now."

Also Tuesday, PA spokesman Nabil Abu Rudaina was quoted by Qatari news agency QNA as saying that Abbas had received a letter from the United States, during a visit to Athens.

Though details of the letter were not released, the spokesperson said a Palestinian response would not be sent before a consultative meeting is held with the Palestinian Authority and the Arab League.

On Tuesday night, Abbas and Arab League Chief Amr Moussa held a phone conversation in which they discussed recent US actions and the response that should be undertaken by the Arab League, Abu Rudaina said.

Abbas is expected in Cairo on Thursday for consultations with Arab leaders. Among the Palestinians' options are finding a new formula for peace talks or taking unilateral action, such as rallying international recognition for a Palestinian state in the absence of a peace deal.

Saeb Erekat, the chief Palestinian negotiator, said a next step would be to ask the United States to recognize a Palestinian state.

Erekat suggested that such a nod from the Americans, which would represent a sharp deviation from current US policy, would be crucial for resuming negotiations.

"It can't be business as usual," Erekat said, after nearly two decades of intermittent talks.